- HEARING TO REVIEW MARKET PROMOTION PROGRAMS AND THEIR EFFECTIVENESS ON EXPANDING EXPORTS OF U.S. AGRICULTURAL PRODUCTS

[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]

HEARING TO REVIEW MARKET PROMOTION PROGRAMS AND THEIR EFFECTIVENESS ON
EXPANDING EXPORTS OF U.S. AGRICULTURAL PRODUCTS

=======================================================================

HEARING

BEFORE THE

SUBCOMMITTEE ON RURAL DEVELOPMENT, RESEARCH, BIOTECHNOLOGY, AND
FOREIGN AGRICULTURE

OF THE

COMMITTEE ON AGRICULTURE
HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

__________

APRIL 7, 2011

__________

Serial No. 112-9

Printed for the use of the Committee on Agriculture
agriculture.house.gov

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65-893 WASHINGTON : 2011
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COMMITTEE ON AGRICULTURE

FRANK D. LUCAS, Oklahoma, Chairman

BOB GOODLATTE, Virginia, COLLIN C. PETERSON, Minnesota,
Vice Chairman Ranking Minority Member
TIMOTHY V. JOHNSON, Illinois TIM HOLDEN, Pennsylvania
STEVE KING, Iowa MIKE McINTYRE, North Carolina
RANDY NEUGEBAUER, Texas LEONARD L. BOSWELL, Iowa
K. MICHAEL CONAWAY, Texas JOE BACA, California
JEFF FORTENBERRY, Nebraska DENNIS A. CARDOZA, California
JEAN SCHMIDT, Ohio DAVID SCOTT, Georgia
GLENN THOMPSON, Pennsylvania HENRY CUELLAR, Texas
THOMAS J. ROONEY, Florida JIM COSTA, California
MARLIN A. STUTZMAN, Indiana TIMOTHY J. WALZ, Minnesota
BOB GIBBS, Ohio KURT SCHRADER, Oregon
AUSTIN SCOTT, Georgia LARRY KISSELL, North Carolina
STEPHEN LEE FINCHER, Tennessee WILLIAM L. OWENS, New York
SCOTT R. TIPTON, Colorado CHELLIE PINGREE, Maine
STEVE SOUTHERLAND II, Florida JOE COURTNEY, Connecticut
ERIC A. ``RICK'' CRAWFORD, Arkansas PETER WELCH, Vermont
MARTHA ROBY, Alabama MARCIA L. FUDGE, Ohio
TIM HUELSKAMP, Kansas GREGORIO KILILI CAMACHO SABLAN,
SCOTT DesJARLAIS, Tennessee Northern Mariana Islands
RENEE L. ELLMERS, North Carolina TERRI A. SEWELL, Alabama
CHRISTOPHER P. GIBSON, New York JAMES P. McGOVERN, Massachusetts
RANDY HULTGREN, Illinois
VICKY HARTZLER, Missouri
ROBERT T. SCHILLING, Illinois
REID J. RIBBLE, Wisconsin

______

Professional Staff

Nicole Scott, Staff Director

Kevin J. Kramp, Chief Counsel

Tamara Hinton, Communications Director

Robert L. Larew, Minority Staff Director

______

Subcommittee on Rural Development, Research, Biotechnology, and Foreign
Agriculture

TIMOTHY V. JOHNSON, Illinois, Chairman

GLENN THOMPSON, Pennsylvania JIM COSTA, California, Ranking
MARLIN A. STUTZMAN, Indiana Minority Member
AUSTIN SCOTT, Georgia HENRY CUELLAR, Texas
RANDY HULTGREN, Illinois PETER WELCH, Vermont
VICKY HARTZLER, Missouri TERRI A. SEWELL, Alabama
ROBERT T. SCHILLING, Illinois LARRY KISSELL, North Carolina

Mike Dunlap, Subcommittee Staff Director

(ii)

C O N T E N T S

----------
Page
Costa, Hon. Jim, a Representative in Congress from California,
opening statement.............................................. 2
Johnson, Hon. Timothy V., a Representative in Congress from
Illinois, opening statement.................................... 1
Prepared statement........................................... 1

Witnesses

Brewer, John, Administrator, Foreign Agricultural Service, U.S.
Department of Agriculture, Washington, D.C..................... 3
Prepared statement........................................... 5
Submitted questions.......................................... 98
Wootton, Michael J., Senior Vice President Corporate Relations,
Sunkist Growers; Chairman, Coalition to Promote U.S.
Agricultural Exports, Sherman Oaks, CA; on behalf of National
Council of Farmer Cooperatives................................. 38
Prepared statement........................................... 39
Censky, Stephen L., Chief Executive Officer, American Soybean
Association, St. Louis, MO..................................... 43
Prepared statement........................................... 44
Lively, R. Thad, Senior Vice President, Trade Access, U.S. Meat
Export Federation, Denver, CO.................................. 48
Prepared statement........................................... 49
Hamilton, Tim, Executive Director, Food Export Association of the
Midwest USA and Food Export USA--Northeast, Chicago, IL........ 51
Prepared statement........................................... 53
Nikolich, George, Vice President, Technical Operations, Gerawan
Farming, Inc.; Board Member, California Grape & Tree Fruit
League, Reedley, CA............................................ 56
Prepared statement........................................... 57

Submitted Material

Bedwell, Berry, President, California Grape and Tree Fruit
League, submitted letter....................................... 69
Brauner, Susan, Director of Public Affairs, Blue Diamond Growers;
Executive Member, Coalition to Promote U.S. Agricultural
Exports; Member, National Council of Farmer Cooperatives,
submitted statement............................................ 70
Cotton, Guy P., Grower Direct Marketing, submitted letter........ 71
Darneille, Wallace L., President and Chief Executive Officer,
Plains Cotton Cooperative Association, submitted statement..... 72
Dorr, Thomas C., President and Chief Executive Officer, U.S.
Grains Council, submitted statement and charts................. 73
Engelhard, Dennis, President, United States Dry Bean Council,
submitted letter............................................... 79
Keck, Ken O., Executive Director, Florida Department of Citrus,
submitted statement and charts................................. 80
Wilson, Chiles, President, Rivermaid Trading Company, submitted
letter......................................................... 87
American Seed Trade Association, submitted statement............. 87
U.S. Apple Association, submitted statement...................... 91
U.S. Wheat Associates; National Association of Wheat Growers,
submitted statement and fact sheet............................. 93
USA Rice Federation, submitted statement......................... 96

HEARING TO REVIEW MARKET PROMOTION PROGRAMS AND THEIR EFFECTIVENESS ON

EXPANDING EXPORTS OF U.S. AGRICULTURAL PRODUCTS

----------

THURSDAY, APRIL 7, 2011

House of Representatives,
Subcommittee on Rural Development, Research,
Biotechnology, and Foreign Agriculture,
Committee on Agriculture,
Washington, D.C.
The Subcommittee met, pursuant to call, at 9:30 a.m., in
Room 1300 of the Longworth House Office Building, Hon. Timothy
V. Johnson [Chairman of the Subcommittee] presiding.
Members present: Representatives Johnson, Thompson,
Stutzman, Scott, Hartzler, Hultgren, Schilling, Costa, Cuellar,
Welch, Sewell, and Kissell.
Staff present: Mike Dunlap, Tamara Hinton, John Konya, John
Porter, Debbie Smith, Andy Baker, Scott Kuschmider, and Jamie
Mitchell.

OPENING STATEMENT OF HON. TIMOTHY V. JOHNSON, A REPRESENTATIVE
IN CONGRESS FROM ILLINOIS

The Chairman. I will now call this hearing of the
Subcommittee on Rural Development, Research, Biotechnology, and
Foreign Agriculture to review market promotion programs and
their effectiveness on expanding the exports of U.S.
agricultural products, to order.
I am Congressman Johnson, and this is our Ranking Member,
Mr. Costa, of California. I have already asked that my opening
statement be inserted in the record.
[The prepared statement of Mr. Johnson appears at the
conclusion of the hearing:]

Prepared Statement of Hon. Timothy V. Johnson, a Representative in
Congress from Illinois
Good morning. I would like to start by thanking Administrator
Brewer for being here today, and each of our witnesses on our second
panel for making time in their schedules and traveling across the
country to be here this morning.
The prosperity of rural America is closely tied to the prosperity
of our farmers and ranchers. At a time when the country is struggling
to recover from a dramatic economic downturn, U.S. agricultural exports
have been expanded through the hard work of our producers, exporters,
and those who work to create new opportunities in foreign markets.
As the global population continues to expand, greater demand for
food will follow. I know that our farmers and ranchers are up to the
task and will continue to be the most efficient producers of food,
fiber, and fuel in the world. However the global marketplace is not
always an easy environment to navigate and many barriers to trade exist
throughout our key markets.
The Administration recently released three updated reports
detailing specific barriers our exporters must overcome when seeking
new market opportunities. These reports, over 600 pages in total,
illustrate just how challenging it can be for our producers to begin or
continue exporting.
Today we will be discussing five important market promotion
programs designed to tackle non-tariff trade barriers. The Market
Access Program, Foreign Market Development Program, Emerging Markets
Program, Quality Samples Program, and the Technical Assistance for
Specialty Crops program are each designed to assist various commodities
and sectors.
From our first panel we hope to gain greater clarity with regard to
the changes that USDA has proposed for the Market Access and Foreign
Market Development programs. We look forward to working with the
administration to address ways the programs can be strengthened. We
also look forward to receiving an update on how the Foreign
Agricultural Service is fulfilling its core mission of expanding
exports of U.S. agricultural goods.
Our second panel is comprised of a diverse group of witnesses
representing a cross section of agricultural exporters. We look forward
to their insights on these programs, the challenges they are facing,
and how they have leveraged these programs to increase exports.
I look forward to the testimony that will be given today, and thank
our witnesses again for being here this morning.

The Chairman. And now I call on our distinguished Ranking
Member, the gentleman from California and former Chairman of
the appropriate Subcommittee here in the Agriculture Committee,
Mr. Costa.

OPENING STATEMENT OF HON. JIM COSTA, A REPRESENTATIVE IN
CONGRESS FROM CALIFORNIA

Mr. Costa. Thank you very much, Chairman Johnson, for
calling this important Subcommittee hearing to review the
market promotion programs, their effectiveness on expanding
exports of U.S. agricultural products. The cornucopia of
agricultural products that we grow in this nation clearly are
the best in terms of quality and in terms of yield, and our
ability to feed our nation and to export our products are an
important part of maintaining a strong economic agricultural
industry in our country.
And I think we all believe in the importance of free
markets. The problem that we have, of course, is that we
compete in foreign markets in which there are tariffs and there
are non-tariff barriers. So, this Subcommittee's hearing this
morning is an important opportunity to point out many of those
barriers that limit our farmers or ranchers, dairymen and
dairywomen, the people who do this with wonderful, effective
ability and with cutting-edge technologies to not only make a
profit at home but to be able to also make a profit in selling
their products abroad.
We have a couple of witnesses who will testify in the
second panel today from California, and obviously I am proud of
those folks. We will introduce them at the appropriate time. I
just want to underline, Mr. Chairman, your important role that
you will play and that we all must in the Subcommittee, in
ensuring that we connect American agriculture producers to the
value-added agricultural businesses of all sizes and varieties
to the world markets, and under the Federal Assistance Service,
Foreign Assistance Service we know that there are important
efforts that take place.
Mr. Brewer, I will look forward to hearing your comments.
These efforts, these programs help keep markets open for the
long term while we work to establish new markets. As an
example, we have in Northern California a very thriving rice
industry, but they have worked for 20 years to develop markets
in Japan. That is not easy because that is, in the Japanese
instance, a staple crop, and they don't want to be dependent on
foreign sources of rice, but yet we have been able to make
inroads there.
These programs help promote free and fair global trading in
a system today that is dominated by the World Trade
Organization, and oftentimes we have issues with the World
Trade Organization. They help resolve non-tariff trade
barriers, particularly as it relates to unique sanitary and
phytosanitary challenges that we have in many of our specialty
crops across the country. Oftentimes I believe that some
countries raise as an issue of phytosanitary standards when it
is really not an issue, but they use it to leverage on trade
negotiations. I think our food that is grown here is the gold
standard, frankly, in safety standards, on health and safety,
but nonetheless, these issues get raised.
So I look forward to hearing the testimony today from the
panel witnesses. I look forward to continuing to work with my
colleagues on this Subcommittee. It is an important
Subcommittee, and Mr. Chairman, I know you are going to
continue the guidance and leadership as we work on these issues
together.
Thank you.
The Chairman. Thank you, Ranking Member Costa. As I look to
see my colleagues on both sides of the aisle here really have
four individuals whose districts are dramatically impacted by
the subject matter of this hearing, so I appreciate all four of
you being here and would request that any of you who have
opening statements just submit them to the record so we can go
ahead and proceed with the witnesses and assure there is enough
time for your questions.
I think just as an admonition, the indication is that we
will probably start our votes, which will be a fairly short, as
I understand it, a fairly short sequence, about 10:30, so
hopefully we can act appropriately here.
I would like to welcome our first panel, our first witness,
Mr. John Brewer, the Administrator of the Foreign Agricultural
Service, U.S. Department of Agriculture. Mr. Brewer, if you
would like to begin, we welcome you, and we would be pleased to
hear you.

STATEMENT OF JOHN BREWER, ADMINISTRATOR, FOREIGN AGRICULTURAL
SERVICE, U.S. DEPARTMENT OF
AGRICULTURE, WASHINGTON, D.C.

Mr. Brewer. Well, thank you very much, Mr. Chairman.
Mr. Chairman, Members of the Subcommittee, I am pleased to
appear before you to discuss the trade programs administered by
the U.S. Department of Agriculture.
The Foreign Agricultural Service leads USDA efforts to
expand foreign market access for U.S. products, build new
markets, improve the competitive position of U.S. agriculture,
and address food security and capacity building in foreign
countries.
FAS relies on its network of agricultural economists,
market development experts, negotiators, and trade specialists,
both in Washington and in its approximately 100 international
offices that cover 156 countries. FAS attaches provide
expertise to identify and seize opportunities and avert
problems before they become trade barriers that impeded U.S.
exports.
FAS is proud of its contribution to growing U.S.
agricultural exports. U.S. farm exports are expected to reach a
record $135.5 billion in Fiscal Year 2011, eclipsing the 2008
record by more than $20 billion. Importantly, every $1 billion
in agricultural exports generates an additional $1.3 billion in
economic activity and supports 8,400 American jobs.
Agriculture plays an important role in supporting President
Obama's National Export Initiative goal of doubling all U.S.
exports within 5 years. As the President recently said, we know
what it will take for America to win the future. We need to
out-innovate, we need to out-educate, we need to out-build our
competitors. We need an economy that is based not on what we
consume and borrow from other nations, but what we make and
what we sell around the world. USDA stands ready to meet this
challenge.
Our two largest FAS-administered economic export
development programs are the Market Access Program, or MAP, and
the Foreign Market Development Cooperator Program, or FMD. MAP
forms partnerships with nonprofit agricultural trade
organizations, agricultural cooperatives, nonprofit state
regional trade groups, and small and medium-sized entities to
share the costs of overseas marketing and promotional
activities.
The farm bill makes available $200 million for MAP this
year. That amount is paired with industry contributions. In
addition to generic promotions, MAP has a brand promotion
component that funds over 600 small companies and agricultural
cooperatives.
For Foreign Market Development Cooperator Program, or FMD
is a cost-share program that aids in the creation, expansion,
and maintenance of long-term export markets for agricultural
products. The farm bill makes available $34.5 million for FMD
this year. The program fosters a partnership between USDA and
U.S. producers and processors who are represented by nonprofit
commodity or trade associations called cooperators.
USDA and cooperators pool resources to conduct overseas
market development to address long-term foreign import
constraints and export growth opportunities. The economic
impact of MAP and FMD is impressive. An FAS-commissioned cost-
benefit analysis concluded that U.S. agricultural experts
increased by $35 for every dollar invested by government and
industry on market development.
A small but important program we administer called the
Quality Samples Program assist U.S. agricultural in providing
samples to potential importers overseas. QSP has introduced
foreign buyers to a wide variety of U.S. commodities, including
wheat, citrus, and cranberries. In Fiscal Year 2010, $1.89
million of funding was allocated under QSP. The FAS-
administrated Emerging Markets Program improves market access
and develops or promotes U.S. agricultural exports to low and
middle income emerging markets. In Fiscal Year 2010, the EMP
supported 83 projects with funding totaling $8.3 million.
Last year the Technical Assistance for Specialty Crops or
TASC Program assisted specialty crop producers in resolving
numerous phytosanitary and related technical barriers. Under
TASC U.S. exporters have regained market access for millions of
dollars of products from almonds to spinach.
I look forward to working with Congress. Agricultural trade
remains a bright spot in the U.S. economy, consistently
producing a trade surplus.
This concludes my statement. I look forward to answering
any questions you may have.
[The prepared statement of Mr. Brewer follows:]

Prepared Statement of John Brewer, Administrator, Foreign Agricultural
Service, U.S. Department Of Agriculture, Washington, D.C.
Mr. Chairman, Members of the Subcommittee, I am pleased to appear
before you today. I welcome the opportunity to discuss the trade
programs administered by the U.S. Department of Agriculture (USDA).
Introduction
The Foreign Agricultural Service (FAS) is the lead agency of the
U.S. Department of Agriculture (USDA) responsible for addressing the
challenges and opportunities of the dynamic global marketplace by
expanding foreign market access for U.S. products, building new
markets, improving the competitive position of U.S. agriculture, and
addressing food security and capacity building in foreign countries.
FAS has the primary responsibility within USDA for international market
development and export financing, trade agreements and negotiations,
and the analysis and dissemination of vital market intelligence and
data to agricultural producers and exporters. FAS administers food aid
programs and mobilizes USDA's unique resources and expertise in
agricultural development activities.
FAS relies on its global network of agricultural economists, market
development experts, negotiators and trade specialists both in
Washington, DC, and its approximately 100 international offices that
cover 156 countries. FAS attaches and counselors serving at U.S.
Embassies are our eyes and ears around the world, providing the
agricultural expertise to identify and seize opportunities, by
capturing real-time information on emerging trade and market
development issues, and averting problems before they become trade
barriers that impede U.S. exports.
Importance of Maintaining and Expanding Agricultural Trade
At FAS, we are proud of our contributions to growing U.S.
agricultural exports. Last month Secretary Vilsack announced that U.S.
farm exports are expected to reach a record $135.5 billion in Fiscal
Year (FY) 2011, eclipsing the 2008 record by more than $20 billion.
Compared to FY 2010, export value is expected to grow by 25 percent and
volume by ten percent. The agricultural trade surplus is projected to
reach a record $47.5 billion. Agriculture is a bright spot in the U.S.
trade portfolio where we have been consistently running a trade
surplus.
These numbers are good news, not just for farmers and ranchers and
the businesses and communities that support them, but for our nation's
economy as a whole. Every $1 billion in agricultural exports generates
an additional $1.31 billion in economic activity and supports 8,400
American jobs. Agriculture continues to play an important role in
support of President Obama's National Export Initiative goal of
doubling all U.S. exports within 5 years.
As the President recently said, ``We know what it will take for
America to win the future. We need to out-innovate, we need to out-
educate, we need to out-build our competitors. We need an economy
that's based not on what we consume and borrow from other nations, but
what we make and what we sell around the world. We need to make America
the best place on Earth to do business.'' USDA stands ready to meet
this challenge.
We must open, expand, and maintain access to foreign markets, where
95 percent of the world's consumers live. Participants from all corners
of the U.S. agricultural community utilize FAS-administered trade
programs to reach these consumers, complementing Administration efforts
to open and maintain markets through trade negotiations, diplomacy, and
enforcement of trade agreements.
Market Development Programs
FAS-administered export development programs include: the Market
Access Program (MAP), Foreign Market Development (Cooperator) Program
(FMD), Technical Assistance for Specialty Crops Program (TASC), Quality
Samples Program (QSP), and Emerging Markets Program (EMP). These cost-
share programs provide partial matching funds to eligible U.S.
organizations to conduct a range of activities, including market
research, consumer promotion, maintaining and expanding relations with
foreign buyers, market development, and market access support. This
partnership in market development programs provides a long-term
commitment to support U.S. producers and exporters to increase sales to
current and potential customers in foreign markets. FAS staff assists
U.S. agricultural trade associations and others to develop programs
that build on effective strategic planning, involve broad industry
representation, identify the best prospects for their products
overseas, and show positive results.
Market Access Program (MAP)
The largest market development program operated by the Department
is the Market Access Program (MAP). MAP is a cost-share program that
uses funds from USDA's Commodity Credit Corporation (CCC) to aid in the
creation, expansion, and maintenance of foreign markets for U.S.
agricultural products. MAP forms partnerships between nonprofit U.S.
agricultural trade organizations, U.S. agricultural cooperatives,
nonprofit State Regional Trade Groups, and small and medium-sized U.S.
commercial entities to share the costs of overseas marketing and
promotional activities, such as consumer promotions, market research,
and trade show participation. The current farm bill makes available
$200 million of CCC funds for MAP this year; that amount is paired with
industry contributions. Applicants submit MAP proposals to USDA as part
of a competitive Unified Export Strategy (UES) process, which allows
applicants to request funding for various USDA foreign market
development programs through a single, strategically coordinated
proposal. One strength of the UES process is that utilizing the
complementary nature of the various market development programs is
emphasized. For example, using both MAP and Quality Sample Program
(QSP) funds in a coordinated effort of technical support and test
product, the Cranberry Marketing Committee has made great strides in
developing the Mexican market by targeting food manufacturers. In just
two years, 33 new products containing cranberries were introduced in
Mexico, and U.S. cranberry exports increased by 42 percent in one year.
In addition to generic promotions, MAP has a brand promotion
component that provides export promotion funding to over 600 small
companies and agricultural cooperatives annually. To conduct branded
product promotion activities, individual companies must provide at
least 50 percent of funding. Most small companies and agricultural
producer cooperatives access market development programming through one
of the four State Regional Trade Groups (SRTGs)--Food Export
Association of the Midwest USA, Food Export USA Northeast, Southern
United States Trade Association, and Western United States Agricultural
Trade Association. The SRTGs work closely with the State Departments of
Agriculture in their respective regions to identify eligible company
participants and export opportunities, and then bring the two together.
In that effort, SRTGs provide small companies with export readiness
training and organize trade missions, as well as branded programming
opportunities to directly access MAP funds for individual company
promotions and trade show participation.
WildRoots, a small healthy snack food company, with two production
facilities in Illinois and one in Nebraska, matched MAP branded funds
to market their products in Canada. Export sales soared from zero in
2008 to over $4 million in 2010. The company buys blueberries from
Michigan, corn and soy products from Illinois, oats from Nebraska,
cranberries from Massachusetts, and almonds from California. According
to a WildRoots co-founder, ``Without the branded program, we simply
would never have been able to compete with Canadian producers. It has
moved our business to a new level and has promoted U.S.-based
agricultural products, creating jobs in an economy that desperately
needs them.''
Foreign Market Development (Cooperator) Program (FMD)
The Foreign Market Development (Cooperator) Program (FMD) is a
cost-share program that aids in the creation, expansion, and
maintenance of long-term export markets for U.S. agricultural products.
The current farm bill makes available $34.5 million CCC funds for FMD
this year. The program fosters a trade promotion partnership between
USDA and U.S. agricultural producers and processors who are represented
by nonprofit commodity or trade associations called Cooperators. Under
this partnership, USDA and each Cooperator pool their technical and
financial resources to conduct overseas market development activities
that are generic in nature. Activities must contribute to the
maintenance or growth of demand for the agricultural commodities and
generally address long-term foreign import constraints and export
growth opportunities. Programs focus on matters such as reducing
infrastructural or historical market impediments, improving processing
capabilities, modifying codes and standards, and identifying new
markets or new applications or uses for the agricultural commodity or
product in the foreign market. Twenty-one organizations representing a
broad sample of U.S. agriculture, including peanuts, sunflower,
soybeans, livestock genetics, dry beans, wheat, poultry, and rice,
benefited from receiving a total of $34.15 million in Fiscal Year 2010
through the FMD program.
Through the FMD program, U.S. sunflower producers' activities are
paying dividends in Spain. To increase awareness of confectionery
sunflower seed and build demand in Spain, the National Sunflower
Association (NSA) used FMD funding to create and implement an
integrated and highly successful marketing program of trade
advertisements, newsletters, trade shows, seminars, and trade missions.
Through this work, U.S. sales to Spain reached nearly $270 million,
making Spain the top market for U.S. confectionery sunflower seeds, and
generating jobs in top sunflower producing states including Colorado,
Kansas, Minnesota, North Dakota, Oklahoma, South Dakota, and Texas.
Economic Impact of MAP and FMD Programs
The economic impact of the MAP and FMD programs is impressive. An
FAS commissioned cost-benefit analysis in March 2010 concluded that the
programs effectively leveraged private and public sector resources in a
unique partnership to increase U.S. food and agricultural exports. The
analysis concluded for the time period 2002 through 2009 that U.S. food
and agricultural exports increased by $35 for every dollar invested by
government and industry on market development. Additionally, U.S.
agricultural exports in 2009 were $6.1 billion higher than they would
have been without the increased investment in market development. The
study also found that an estimated 47 percent of the programs' total
trade impact accrued to commodities not receiving market development
assistance--a phenomenon known as the ``halo'' effect. In other words,
non-promoted U.S. commodities benefited from increased promotion of
other U.S. commodities in the same market.
Quality Samples Program (QSP)
The Quality Samples Program (QSP) helps U.S. agricultural trade
organizations provide samples of their agricultural products to
potential importers overseas, thus encouraging potential customers to
discover U.S. quality. The QSP also allows manufacturers overseas to do
test runs to assess how U.S. food and fiber products can best meet
their production needs. USDA has approved QSP proposals to promote a
wide variety of U.S. commodities, including wheat, citrus, cranberries,
ginseng, hops, potatoes, hides, rice, and soybeans. Many other
commodities are eligible. Organizations received funding allocations
under QSP in Fiscal Year 2010 for approximately $1.89 million of CCC
funds.
One example of how QSP has fostered interest in U.S. product is
sheepskin exports to China. The American Sheep Industry Association
reports QSP as a key factor in convincing reluctant buyers to try U.S.
sheepskins. Following QSP trials in China, two companies have become
regular and consistent buyers of U.S. sheepskins. As of last year, U.S.
sheepskin exports to China had increased significantly to 1.1 million
pieces.
Emerging Markets Program (EMP)
In 2010, the Emerging Markets Program (EMP) assisted Wisconsin
ginseng growers battle counterfeits. For more than a decade, the
Ginseng Board of Wisconsin (GBW) has struggled with Chinese
counterfeiters selling fake Wisconsin Ginseng. With 90 percent of its
exports going to China, the GBW moved aggressively to regain control of
its brand. Using EMP, GBW initiated research to develop a technique to
detect trace elements of ginseng's valuable root to Wisconsin or where
it was grown originally; initial findings are promising.
EMP is specifically designed to improve market access and develop
or promote exports of U.S. agricultural commodities and products to low
and middle income emerging markets through cost-share assistance to
eligible applicants for approved technical assistance activities.
Emerging markets are defined as those target countries or regional
country groupings with per capita income of less than $11,905 (the
current ceiling on upper middle income economies as determined by the
World Bank) and populations greater than one million. Private, Federal,
and state organizations are eligible to participate in EMP. For Fiscal
Year 2010, the EMP program supported 83 agricultural export promotion
projects with funding totaling $8.3 million.
Technical Assistance for Specialty Crops (TASC)
Last year, the Technical Assistance for Specialty Crops (TASC)
program was instrumental in assisting the U.S. potato exporters in
overcoming a Thai phytosanitary protocol that was preventing U.S.
exports from certain states. Following several months of negotiations
between the Thailand Department of Agriculture and USDA, the U.S.
Potato Board (USPB) used TASC to arrange for Thai officials to visit
the U.S. and review U.S. seed certification procedures, seed
cultivation practices and phytosanitary mitigation measures. Following
this activity, Thailand agreed to additional market access that more
than doubles--to fourteen--the number of states eligible to export seed
potatoes to Thailand. Seed potatoes from Colorado, Maine, Michigan,
Minnesota, Montana, Nebraska, New York, North Dakota, Wisconsin and
Wyoming may now be exported to Thailand. FAS estimates sales of
$250,000 to $500,000 during the first year of Thai market access, while
the USPB estimates that expanded market access could boost exports to
Thailand to $1 million in 3 to 5 years.
Another example is U.S. hops exports to Canada. With more than $18
million in hops exports, Canada is the fifth largest export market for
U.S. producers. In response to limited pesticide tolerances in Canada
that potentially threatened trade, TASC funds supported U.S. hops
industry efforts to work with regulators in Canada in establishing five
new hops-related maximum residue levels in Canada for pesticides
critical to U.S. hop production. The Canadian tolerances were set at
safe levels that allow U.S. hop growers to apply essential U.S. crop
protection tools that significantly reduce the risk of shipping hops to
Canada. Given that over half of U.S. hop production is exported, the
setting of pesticide tolerances in one of the industry's most crucial
export markets has been vital for this industry.
These are just two examples of how U.S. exports have grown as
sanitary, phytosanitary, and technical barriers that denied market
access to U.S. agricultural products were resolved successfully. The
TASC program assists U.S. food and agricultural organizations in
addressing phytosanitary and technical barriers that prohibit or
threaten the export of U.S. specialty crops. Using TASC, USDA has
successfully helped U.S. exporters regain market access for millions of
dollars of products from almonds to spinach. The current farm bill
provides $9 million in CCC funds for the TASC program this year.
Export Credit Guarantee Program (GSM-102)
FAS, in conjunction with the Farm Service Agency, administers the
CCC-funded export credit guarantee program (GSM-102) for commercial
financing of U.S. agricultural exports. The GSM-102 program facilitates
exports to buyers in countries where credit is necessary to maintain or
increase U.S. sales. In FY 2010, guarantees covered $3.09 billion in
sales that ran the gamut from corn to Costa Rica to soybeans to
Indonesia and from wheat to Nigeria to wood chips to Turkey. In FY
2011, we expect to make available approximately $5.5 billion in GSM-102
guarantees for U.S. agricultural exporters to target sales to over 100
eligible country destinations.
Conclusion
As Administrator of USDA's Foreign Agricultural Service, I am proud
of our efforts to improve foreign market access for U.S. products,
build new markets, and improve the competitive position of U.S.
agriculture in the global marketplace. We look forward to continue
working with Congress in support of our efforts to open markets around
the world for U.S. agricultural products. Agricultural trade remains a
bright spot in the U.S. economy, consistently producing a trade surplus
and creating American jobs. As Secretary Vilsack said, ``Our export
success is a testament to the productivity of our farmers and ranchers
and underscores the quality and value of U.S. farm and food products.''
This concludes my statement. I look forward to answering any
questions you may have. Thank you.
Attachments
Market Access Program
The Market Access Program (MAP) uses funds from the U.S. Department
of Agriculture's (USDA) Commodity Credit Corporation (CCC) to aid in
the development, expansion, and maintenance of foreign markets for U.S.
agricultural commodities and products. The MAP is authorized by Section
203 of the Agricultural Trade Act of 1978, and is administered by
USDA's Foreign Agricultural Service (FAS).
The MAP forms a partnership between nonprofit U.S. agricultural
trade associations, nonprofit U.S. agricultural cooperatives, nonprofit
state-regional trade groups, small U.S. businesses, and USDA's CCC to
share the costs of overseas marketing and promotional activities, such
as trade shows, market research, consumer promotions, technical
assistance, trade servicing, and seminars to educate overseas
customers.
How the program benefits U.S. agriculture: Each year, the MAP helps
launch and expand sales of U.S. agricultural, fish, and forest products
overseas. American farmers, ranchers, and food processors and
manufacturers benefit from the MAP. The MAP benefits all regions of the
country through increased exports and rural job expansion.
How the program works: The MAP uses funds from the USDA's CCC to
cost share foreign market promotion activities with program
participants. The Food, Conservation, and Energy Act of 2008, enacted
into law in June 2008, set funding for the MAP at $200 million annually
through Fiscal Year 2012. Each year, USDA announces an application
period for participation in the MAP, publishing an announcement in the
Federal Register. Applicants develop MAP proposals and submit them to
USDA as part of the Unified Export Strategy (UES) process, which allows
applicants to request funding for various USDA foreign market
development programs through a single, strategically coordinated
proposal.
MAP applications undergo a competitive review process based on
criteria specified in the Federal Register announcement. Funds are
awarded to applicants that demonstrate effective performance based on a
clear, long-term strategic plan. FAS sets a program funding level and
signs a program agreement with each participant. Participants must keep
an itemized list of expenses incurred during the program year and
submit them to FAS for reimbursement. Expenses are subject to audits,
and participants are held accountable for maintaining proper
documentation.
Agricultural cooperatives and small companies can receive
assistance under the brand program. A for-profit firm, other than a
cooperative or producer association shall be a small-sized entity that
either owns the brand of the agricultural commodity to be promoted or
has the exclusive rights to use such brand(s). To conduct branded
product promotion activities, individual companies must provide at
least 50 percent of funding. MAP regulations limit the promotion of
branded products in a single country to no more than 5 years. For
generic promotion activities, trade associations and others must meet a
minimum ten percent match requirement. Participants are required to
certify that Federal funds used under the program supplement--not
replace--private sector funds.
What commodities are covered: USDA has approved MAP proposals to
promote a wide variety of U.S. commodities in almost every region of
the world. Among those U.S. food and fiber products are apples,
asparagus, canned peaches, fruit cocktail, catfish, cherries, citrus,
cotton, dairy products, dry beans, eggs, feed grains, frozen potatoes,
grapes, honey, hops, kiwifruit, meat, peanuts, pears, pet food,
pistachios, poultry meat, prunes, raisins, rice, salmon, soybeans,
strawberries, sunflower seeds, surimi, tallow, tomato products,
walnuts, watermelons, and wheat.
Where to get information: For more information about the MAP,
contact the Office of Trade Programs at (202) 720-4327, or visit the
following website at
http://www.fas.usda.gov/mos/programs/map.asp.
Information on FAS programs, trade data, and reports are available
by accessing the FAS Home Page at: http://www.fas.usda.gov.

Fiscal Year 2010 Market Access Program Allocations
------------------------------------------------------------------------
Total FY 2010
Participant Allocation
------------------------------------------------------------------------
Alaska Seafood Marketing Institute $4,631,151
The American Hardwood Export Council, The $8,356,971
Engineered Wood Association, The Softwood
Export Council, & The Southern Forest & Paper
Association
American Peanut Council $2,175,613
American Seed Trade Association $29,701
American Sheep Industry Association $410,298
American Soybean Association $5,751,073
Blue Diamond Growers/Almond Board of California $1,591,718
Brewers Association Inc. $371,779
California Agricultural Export Council $859,622
California Asparagus Commission $141,734
California Cherry Advisory Board $574,344
California Cling Peach Board $484,924
California Fresh Tomato Growers/Florida Tomato $914,485
Committee
California Kiwifruit Commission $302,141
California Pear Advisory Board $470,612
Cal-Pure Pistachios/Western Pistachio $928,895
Association
California Prune Board $3,660,254
California Strawberry Commission $800,092
California Table Grape Commission $3,580,772
California Tree Fruit Agreement $2,498,896
California Walnut Commission $4,622,088
Cherry Marketing Institute $266,847
Cotton Council International $20,645,807
Cranberry Marketing Committee $1,657,476
Distilled Spirits Council $190,624
Florida Department of Citrus $5,284,889
Food Export Association of the Midwest USA $10,691,360
Food Export USA Northeast $7,902,946
Ginseng Board of Wisconsin $186,065
Hawaii Papaya Industry Association $138,654
Hop Growers of America $190,321
Intertribal Agriculture Council $825,196
Mohair Council of America $118,256
National Association of State Department of $3,676,089
Agriculture
National Confectioners Association $1,420,238
National Hay Association $36,555
National Potato Promotion Board $5,231,810
National Renderers Association $824,664
National Sunflower Association $1,168,455
National Watermelon Promotion Board $235,408
New York Wine and Grape Foundation $361,829
Northwest Wine Promotion Coalition $941,717
Organic Trade Association $376,953
Pear Bureau Northwest $3,496,630
Pet Food Institute $1,460,439
Raisin Administrative Committee $3,274,710
Southern United States Trade Association $6,579,951
Sunkist Growers, Inc. $4,072,982
Texas Produce Export Association $105,344
The Catfish Institute $290,442
The Popcorn Board $250,738
U.S. Apple Export Council $885,335
U.S. Dairy Export Council $4,515,671
U.S. Dry Bean Council $1,079,781
U.S. Grains Council $8,232,494
U.S. Hide, Skin & Leather Association $107,918
U.S. Livestock Genetics Exports, Inc. $968,886
U.S. Meat Export Federation $16,495,353
U.S. Wheat Associates $5,790,604
USA Dry Pea and Lentil Council $1,008,314
USA Poultry and Egg Export Council $5,218,646
USA Rice Federation/U.S. Rice Producers $3,834,882
Association
Washington State Fruit Commission $1,128,068
Washington Apple Commission $5,381,945
Welch Foods, Inc. $907,177
Western United States Agricultural Trade $9,674,062
Association
Wine Institute $7,152,261
------------------------
Total $197,441,955
------------------------------------------------------------------------

-------------------------------------------------------------------------
The U.S. Department of Agriculture (USDA) prohibits discrimination
in all its programs and activities on the basis of race, color,
national origin, gender, religion, age, disability, political beliefs,
sexual orientation, and marital or family status. (Not all prohibited
bases apply to all programs.) Persons with disabilities who require
alternative means for communication of program information (Braille,
large print, audiotape, etc.) should contact USDA's TARGET Center at
(202) 720-2600 (voice and TDD).
To file a complaint of discrimination, write USDA, Director, Office
of Civil Rights, Room 326-W, Whitten Building, 14th and Independence
Avenue, SW, Washington D.C. 20250-9410 or call (202) 720-5964 (voice or
TDD). USDA is an equal opportunity provider and employer.
------------------------------------------------------------------------

______

Foreign Market Development Cooperator Program
The Foreign Market Development Cooperator (FMD) Program uses funds
from the U.S. Department of Agriculture's (USDA) Commodity Credit
Corporation (CCC) to create, expand, and maintain long-term export
markets for U.S. agricultural products. First established under the
authority of Public Law 480, the FMD was re-authorized by Title VII of
the Agricultural Trade Act of 1978, and is administrated by USDA's
Foreign Agricultural Service (FAS).
The program has fostered a cost-sharing trade promotion partnership
between USDA and U.S. agricultural producers and processors, who are
represented by nonprofit commodity or trade associations called
Cooperators. FAS enters into partnerships with those eligible nonprofit
U.S. trade organizations that have the broadest producer representation
of the commodity being promoted. Under this partnership, USDA and the
Cooperators pool their technical and financial resources to conduct
overseas market development.
How the program benefits U.S. agriculture: The FMD benefits U.S.
farmers, processors, and exporters by assisting their organizations in
maintaining or increasing market share in existing markets by
addressing long-term foreign market import constraints and by
identifying new markets or new uses for the agricultural commodity or
product in the foreign market. Overseas promotions focus on generic
U.S. commodities, rather than brand-name products, and are targeted
toward long-term development.
How the program works: Under the FMD, CCC funds partially reimburse
cooperators for conducting approved overseas promotional activities.
Preference is given to nonprofit U.S. agricultural and trade groups
that represent an entire industry or are nationwide in membership and
scope.
Each year USDA announces an application period for participation in
the FMD program and publishes it in the Federal Register. Proposals are
developed by trade organizations and may be submitted to USDA as part
of the Unified Export Strategy (UES) process, which allows applicants
to request funding for several USDA foreign market development programs
using a single, strategically coordinated proposal. FMD regulations (7
CFR 1484) define program requirements, including cost-sharing,
strategic planning, reimbursement procedures, records and reporting
requirements, and evaluations.
FMD applications undergo a competitive review process. Funds are
awarded to applicants that demonstrate effective performance based on a
clear long-term strategic plan. Cooperators must keep an itemized list
of expenses incurred during the program year and submit them to USDA
for reimbursement. All expenses are subject to audits, and Cooperators
are accountable for maintaining proper documentation.
Where to get information: For more information on the FMD program,
contact the Office of Trade Programs at (202) 720-4327, or visit the
following website at
http://www.fas.usda.gov/mos/programs/fmdprogram.asp.
General information about FAS programs, resources, and services is
available on the Internet at the FAS home page: http://
www.fas.usda.gov.

Fiscal Year 2010 Foreign Market Development Program Allocations
------------------------------------------------------------------------
Total FY 2010
Cooperator Allocation
------------------------------------------------------------------------
The American Hardwood Export Council, The $3,530,482
Engineered Wood Association, The Softwood
Export Council, & The Southern Forest & Paper
Association
American Peanut Council $737,985
American Seed Trade Association $228,073
American Sheep Industry Association $183,479
American Soybean Association $7,273,160
Cotton Council International $5,052,334
Leather Industries of America $162,157
Mohair Council of America $15,768
National Hay Association $78,325
National Renderers Association $945,818
National Sunflower Association $259,748
North American Millers' Association $60,797
U.S. Dairy Export Council $752,301
U.S. Dry Bean Council $138,264
U.S. Grains Council $4,342,466
U.S. Hide, Skin and Leather Association $155,983
U.S. Livestock Genetics Export, Inc. $763,923
U.S. Meat Export Federation $1,846,115
U.S. Wheat Associates $4,178,916
USA Dry Pea and Lentil Council $185,694
USA Poultry and Egg Export Council $1,613,144
USA Rice Federation $1,645,068
------------------------
Total $34,150,000
------------------------------------------------------------------------

______

Emerging Markets Program
The Emerging Markets Program (EMP) is a market access program that
provides funding for technical assistance activities intended to
promote exports of U.S. agricultural commodities and products to
emerging markets in all geographic regions, consistent with U.S.
foreign policy. The program is authorized by the Food, Agriculture,
Conservation, and Trade Act of 1990, as amended. The EMP regulations
appear at 7 CFR part 1486. Funding is set at $10 million each fiscal
year from the Commodity Credit Corporation from now through the end of
the current farm bill.
The EMP is a generic program. Its resources may be used to support
exports of U.S. agricultural commodities and products only through
generic activities. Projects that endorse or promote branded products
are not eligible for the Program.
Funding is provided through three channels: (1) the Central Fund,
the principle means of funding, made available through a public
announcement; (2) the Technical Issues Resolution Fund (TIRF), to
address technical barriers to those issues that are time sensitive and
are strategic areas of longer term interest; and (3) the Quick Response
Marketing Fund (QRMF), to assist with short-term time-sensitive
marketing opportunities.
What is an Emerging Market? The legislation defines an emerging
market as any country that ``is taking steps toward a market-oriented
economy through the food, agriculture, or rural business sectors of the
economy of the country,'' and ``has the potential to provide a viable
and significant market for United States commodities or products of
United States agricultural commodities.''
There is no fixed list of ``emerging market'' countries. Because
funds are limited and the range of emerging markets is worldwide, the
Program uses certain administrative criteria, in addition to the legal
definition above, to determine whether a country is considered an
emerging market:

(1) Per capita income of less than $12,195, the current ceiling on
upper middle income economies as determined by the World Bank.

(2) Population greater than one million (may encompass regional
groupings, such as the islands of the Caribbean Basin).

Guidance on qualified emerging markets is provided each year in the
Program's application announcement.
Program Priorities: The principal purpose of the program is to
assist U.S. organizations, public and private, to improve market access
by developing, maintaining, or enhancing U.S. exports to low- and
middle-income countries which have or are developing market-oriented
economies, and which can be viable markets for these products. The
underlying premise is that emerging agricultural markets have
distinctive characteristics that benefit from U.S. governmental
assistance before the private sector moves to develop these markets
through normal trade promotional activities. All agricultural
commodities except tobacco are eligible for consideration.
Cost-share, the funding U.S. private organizations are willing to
commit from their own resources to seek export business in an emerging
market, is one of the requirements needed in an application in order to
qualify for funding assistance under the EMP. Justification for Federal
funding is also required.
Types of Projects and Activities: Funding is on a project-by-
project basis. Many types of technical assistance activities that
promote markets for U.S. agricultural products may be eligible for
funding. Examples include feasibility studies, market research,
sectorial assessments, orientation visits, specialized training, and
business workshops. The program is not intended for projects targeted
at end-user consumers. Ineligible activities include in-store
promotions; restaurant promotions; branded product promotions
(including labeling and supplementing normal company sales activities
designed to increase awareness and stimulate sales of branded
products); equipment purchases; costs of new product development;
administrative and operational expenses for trade shows; advertising;
preparation and printing of brochures, flyers, posters, etc., except in
connection with specific technical assistance activities, such as
training seminars; and design and development of Internet websites.
The program complements other FAS marketing programs. Once a market
access issue has been addressed by the EMP, further market development
activities may be considered under other FAS programs.
Eligible Organizations: Any U.S. agricultural or agribusiness
organization, university, state department of agriculture, or USDA
agency (or other Federal agency involved in agricultural issues) is
eligible to participate in the EMP. Preference will be given to
proposals indicating significant support and involvement by private
industry. Proposals will be considered from research and consulting
organizations only as long as they can demonstrate evidence of
substantial participation by U.S. industry. For-profit entities are
also eligible, but may not use program funds to conduct private
business, promote private self-interests, supplement the costs of
normal sales activities, or promote their own products or services
beyond specific uses approved for a given project. USDA market
development cooperators may seek funding to address priority, market-
specific issues or to undertake activities not already serviced by or
unsuitable for funding under other FAS marketing programs, such as the
Foreign Market Development Program and Market Access Program.
The opportunities for applying to the EMP during the annual open
solicitation periods are announced in the Federal Register and on the
FAS website.
Advisory Committee on Emerging Markets: A private sector advisory
committee provides information and advice to help USDA develop
strategies for providing technical assistance and enhancing markets for
U.S. agricultural products in developing markets. More specifically,
committee members review, from a non-governmental perspective, certain
qualified proposals submitted for EMP funding assistance. The Secretary
of Agriculture appoints members to the Committee for 2 year terms.
More Information: Further details on the EMP, including the funding
options under the program (the Central Fund, the Technical Issues
Resolution Fund, and the Quick Response Marketing Fund), additional
qualification requirements, the application and proposal review
process, and administrative policies and procedures are contained in
the Program Regulations, on the FAS Internet site below. For additional
information, contact the USDA-FAS Program Operations Division, Grant
Programs Branch, Phone: (202) 720-4327, Fax: (202) 720-9361, E-mail:
[email protected], Internet: http://www.fas.usda.gov/mos/em-
markets/em-markets.asp.

Fiscal Year 2010 Emerging Markets Program Allocations
------------------------------------------------------------------------
Market Activity Title Amount
------------------------------------------------------------------------
Bangladesh Cotton USA Technical $200,000
Assistance Initiative in
Bangladesh for the Cotton
Council International
Brazil Brazil Craft Beer School $30,000
Seminars for the Brewers
Association
Brazil Market Feasibility Study of $15,041
Brazil for the Alaska
Seafood Marketing Institute
China Food Consumption in China's $468,600
Second-Tier Cities: The New
Frontier for U.S.
Agricultural Export
Opportunities for the
University of Florida
China Exporting U.S. Dairy Genetics $277,632
to China for Cooperative
Resources International
China Hotel, Restaurant, and $212,000
Institutional Sector
Development for USDA/Foreign
Agricultural Service/Chengdu
China Distributor Development $183,000
Program for Emerging City
Markets for USDA/Foreign
Agricultural Service
China Global Food Safety Forum: $174,431
China Exchange for the GIC
Group
China Phase Three of the China Moon $120,000
Cake Project for the
California Agricultural
Export Council
China Fresh Produce in China: $101,011
Identifying Logistic
Constraints and Consumer
Trends for SIAM
Professionals, LLC
China Turkey Market Development in $90,000
China--Expanding Demand for
U.S. Turkey in China by
Increasing its Use in Local
Cuisine for the Minnesota
Department of Agriculture
China China Familiarization Tour of $90,000
Organic Farms, Retail, and
Processors for the Organic
Trade Association
China China Pecan Project for the $70,800
Georgia Pecan Growers
Association
China Implementation of Science- $52,560
based Principles in Risk
Management for USDA/Foreign
Agricultural Service
China Assessment of Exports of $79,818
Hawaii Fresh and Processed
Agricultural Products to
China Markets Under a
Memorandum of Understanding
with the Chinese Ministry of
Commerce, Beijing
International Brand
Management Center for the
Hawaii Department of
Agriculture
China China Beer Distributors $35,000
Education Program for the
Brewers Association
China China Food Safety Law $27,406
Training for USDA/Foreign
Agricultural Service
China Reverse Trade Mission of $14,400
Chinese Tanneries for the
U.S. Hide, Skin and Leather
Association
Egypt Food and Drug Administration $4,690
Middle East and North Africa
Food Safety Workshop for
Regulators for USDA/Foreign
Agricultural Service
El Salvador U.S. Rice Market Research for $31,000
the U.S. Rice Producers
Association
Ghana Ghana Lake Volta Soy in $96,475
Aquaculture Program for the
American Soybean Association
Global Emerging Markets Exploratory Market Research $259,000
To Identify Opportunities
and Launch Preliminary Trade
Servicing, Education, and/or
Promotional Activities in
Emerging Markets for the
U.S. Apple Export Council
Global Emerging Markets Exporting Genomic-Proven U.S. $206,100
Dairy Genetics, Enhancing
Producer Product Knowledge,
Demonstrating U.S. Genomic
Sire Proofs and the New
Generation of Dairy Sires
for Cooperative Resources
International
Global Emerging Markets Global Pesticide Tolerance $196,770
Initiative for U.S.
Specialty Crops: Technical
and Policy Guidance to
Emerging Markets for USDA/
Foreign Agricultural Service
Global Emerging Markets Technical Support for U.S. $195,000
Seed Potato Exports,
Introduction of Cut Seeds to
Foreign Markets for the
National Potato Promotion
Board
Global Emerging Markets Foreign Country Audits of $184,400
U.S. Red Meat Facilities for
the U.S. Meat Export
Federation
Global Emerging Markets Worldwide Market Development $60,000
for the Northwest Wine
Promotion Coalition
Global Emerging Markets Access and Benefit Sharing $55,566
for Genetic Resources Used
in U.S. Food and Agriculture
Exports for USDA/Foreign
Agricultural Service
Global Emerging Markets Translations of Foreign World $52,000
Trade Organization Sanitary
and Phytosanitary and
Technical Barriers to Trade
Notifications for USDA/
Foreign Agricultural Service
Global Emerging Markets Advancing U.S. Positions on $9,880
Pesticide Regulatory
Standards for USDA/Foreign
Agricultural Service
Guatemala U.S. Rice Market Research for $31,000
the U.S. Rice Producers
Association
India India Food Safety Seminars $89,175
for USDA/Foreign
Agricultural Service
India Reverse Trade Mission for $75,438
Retailers and Wholesalers
from India for the Produce
Marketing Association
India India Export Market $75,000
Opportunity Assessment and
Familiarization Tour for the
Organic Trade Association
India India Retail Education $60,000
Activities Reverse Mission
Retail Training Seminars for
the Pear Bureau Northwest
India India Pecan Project for the $55,200
Georgia Pecan Growers
Association
Indonesia Indonesia-U.S. Partnership: $51,000
Agricultural Technology and
Investment Forum for the
Texas A&M Norman Borlaug
Institute
Indonesia Technical Assistance for the $41,014
Republic of Indonesia's
National Agency for Drug and
Food Control to Better
Understand the U.S. System
To Ensure the Safety of
Processed Foods for USDA/
Foreign Agricultural Service
Indonesia Product Introduction, Care $14,000
and Handling, and
Merchandising Technique
Seminars for Fresh Sweet
Cherries for the Washington
State Fruit Commission
Iraq Trade Mission to Iraq for $137,352
USDA/Foreign Agricultural
Service
Jamaica U.S. Technical and Regulatory $17,676
Orientation for Jamaican
Food Import Authorities for
USDA/Foreign Agricultural
Service/Dominican Republic
Malaysia Agricultural Biotechnology $130,535
Outreach to Malaysian
Officials for USDA/Foreign
Agricultural Service/Kuala
Lumpur
Malaysia Technical Workshop on Coated $56,086
Foods Applications for the
USA Dry Pea and Lentil
Council
Mongolia 2010 Microbiology and $21,650
International Residue
Training Seminars for
International Government
Laboratory Officials for
USDA/Foreign Agricultural
Service/Beijing
Mongolia Food Safety and Inspection $21,650
Service Meat and Poultry
Inspection Seminar for USDA/
Foreign Agricultural Service/
Beijing
Nigeria, Senegal, Cameroon Increasing Access to U.S. Soy $250,000
Products in Nigeria,
Senegal, and Cameroon for
the American Soybean
Association
Pakistan U.S. Soy Food Product $152,224
Promotion in Pakistan for
the American Soybean
Association
Pakistan Opening Pakistan to U.S. $111,755
Dairy and Genetics for World
Wide Sires, Ltd.
Philippines Philippines Agricultural $63,584
Biotechnology Regulatory
Outreach for USDA/Foreign
Agricultural Service/Manila
Poland Second Phase of Market $100,000
Development in Poland for
California Almonds for the
Almond Board of California
Regional: Asia-Pacific APEC High-Level Policy $153,936
Economic Cooperation (APEC) Dialogue Workshop on
Approaches and Tools To
Promote Investment in
Agricultural Biotechnology
for USDA/Foreign
Agricultural Service
Regional: APEC APEC Export Certification $108,800
Roundtable for USDA/Foreign
Agricultural Service
Regional: APEC APEC High-Level Policy $187,174
Dialogue on Agricultural
Biotechnology for USDA/
Foreign Agricultural Service
Regional: Caribbean Basin Central American $142,356
Microbiological Standards
Program for USDA/Foreign
Agricultural Service
Regional: Caribbean Basin Maintaining Access for U.S. $96,270
Exports to the Caribbean for
USDA/Foreign Agricultural
Service
Regional: Caribbean Basin Caribbean Food Safety Program $93,300
for USDA/Foreign
Agricultural Service
Regional: Central America- Food Safety Standard-Setting $97,400
Dominican Republic Free Training for Participants in
Trade Agreement (CAFTA-DR) CAFTA-DR for USDA/Foreign
Agricultural Service
Regional: Latin America Furthering Approvals of $413,785
Genetically Engineered
Plants Through Promotion of
Data Transportability for
the International Life
Sciences Institute Research
Foundation
Regional: Latin America U.S. Outreach Effort To $157,378
Influence Negotiation by
Parties to the Cartagena
Protocol for Biosafety for
USDA/Foreign Agricultural
Service
Regional: Latin America Inter-American Institute for
Cooperation on Agriculture
(http://www.iica.int/Eng/
Pages/default.aspx)
Workshop for Latin America $72,140
Countries on the Annex (LLP
Annex) to the Codex
Guideline for the Conduct of
Food Safety Assessment of
Foods Derived from
Recombinant-DNA Plants for
USDA/Foreign Agricultural
Service
Regional: Latin America Promotion of Consumer- $56,462
Oriented Agricultural
Products for Latin America
through the International
Supermarket Management Class
for IGA International, Inc.
Regional: Latin America, Western Hemisphere Codex $103,310
Caribbean Basin Delegates' Colloquium for
USDA/Foreign Agricultural
Service
Regional: Latin America, Enhancing Latin American and $100,000
Caribbean Basin Caribbean Participation in
Codex for USDA/Foreign
Agricultural Service
Regional: Southeast Asia Southeast Asia Fruit and $223,218
Vegetable Consumer Trends,
Preferences Research for the
Washington Apple Commission
Regional: Southeast Asia Increasing Understanding of $137,850
U.S. and International
Flavor Safety Evaluation
Processes for the Flavor and
Extract Manufacturers
Association
Regional: Southeast Asia Baking with Pea Flour in $63,573
Southeast Asia for the USA
Dry Pea and Lentil Council
Regional: Southeast Asia Nutritional and Technical $46,820
Information on Dry Beans for
Southeast Asian Buyers for
the U.S. Dry Bean Council
Regional: Southeast Asia Second Phase of U.S. Dairy in $37,667
Selected Asian Bakery
Markets Project for the
California Milk Advisory
Board
Russia Review of U.S. Poultry $120,000
Slaughter and Cold Storage
Facilities for the USA
Poultry and Egg Export
Council
Russia Russia Retail Education $87,200
Activities Reverse Mission
Retail Training Seminars for
the Pear Bureau Northwest
Russia Research To Identify $70,000
Opportunities and Launch
Trade Servicing, Education,
and Promotion in Russia for
the California Prune Board
Russia U.S.-Russia Bilateral $26,342
Consultative Mechanism on
Biotechnology Technical
Exchange Meeting for USDA/
Foreign Agricultural Service
South Africa, Mauritius, Southern Africa Biotechnology $109,265
Zimbabwe, Mozambique Outreach for South Africa,
Mauritius, Zimbabwe, and
Mozambique for USDA/Foreign
Agricultural Service/
Pretoria
Sri Lanka Prospecting for U.S. $84,206
Feedstuff and Soymeal Sales
in Sri Lanka for the Iowa
Soybean Association
Sri Lanka Biotechnology Training for $5,000
Senior Level Sri Lankan
Officials for USDA/Foreign
Agricultural Service
Thailand Thailand Importer Developer $185,535
Program for the Southern
United States Trade
Association
Thailand Technical Support to U.S. $84,235
Frozen Potato Tariff
Reduction Efforts in
Thailand for the National
Potato Promotion Board
Thailand Restrictive Labeling $36,450
Requirements for Alcoholic
Beverages to Thailand for
USDA/Foreign Agricultural
Service
Turkey Biotech Speakers for Istanbul $38,680
Seminar and Public Outreach
for USDA/Foreign
Agricultural Service/Ankara
Turkey U.S. Dairy Genetics to $22,551
Turkey, Overcoming
Unjustifiable Regulatory
Barriers for the National
Association of Animal
Breeders
Turkey Expanding Indiana Hardwood $20,900
Exports in Turkey for the
Indiana State Department of
Agriculture
Vietnam Vietnamese Wet Blue Buyers $32,450
Team to the United States
for the Leather Industries
of America
------------------------------------------------------------------------
Total Allocations $8,193,172
------------------------------------------------------------------------

______

Technical Assistance for Specialty Crops Program
The Food, Conservation, and Energy Act of 2008 reauthorized the
Technical Assistance for Specialty Crops (TASC) Program and provided
mandatory Commodity Credit Corporation (CCC) resources of $4 million in
FY 2008, $7 million in FY 2009, $8 million in FY 2010, and $9 million
in FY 2011 and FY 2012.
How the program benefits U.S. agriculture: The TASC program is
designed to assist U.S. organizations by providing funding for projects
that address sanitary, phytosanitary and related technical barriers
that prohibit or threaten the export of U.S. specialty crops. For
purposes of the TASC program, a ``specialty crop'' is defined as all
cultivated plants and the products thereof produced in the United
States except wheat, feed grains, oilseeds, cotton, rice, peanuts,
sugar, and tobacco. Examples of activities these grants may cover
include seminars and workshops, study tours, field surveys, pest and
disease research, and pre-clearance programs.
How the program works: TASC proposals are accepted from any U.S.
organization, including, but not limited to, nonprofit trade
associations, universities, agricultural cooperatives, private
companies, U.S. Government agencies and state government agencies. The
Foreign Agricultural Service (FAS), which administers the program,
provides grant funds as direct assistance to U.S. organizations.
Applicant contributions are not required, but are strongly encouraged.
Each year, the U.S. Department of Agriculture announces an
application period for participation in the TASC program, publishing it
in the Federal Register. TASC applications undergo a competitive review
process based on criteria specified in 7 CFR part 1487 and in the
Federal Register announcement. Funds are awarded to applicants that
demonstrate how their projects will overcome trade barriers resulting
in market access retention and expansion for specialty crops. Awards
are for a maximum of $500,000 per year and for projects of up to 5
years. Proposals may target any eligible export market, including
single countries or reasonable regional groupings of countries.
Applicants may submit multiple proposals, but no TASC participant may
have more than five projects underway at the same time. Funds may be
requested as advance payments or on a reimbursement basis. Participants
are required to maintain records and documents associated with the
program agreement.
Additional Information: To submit a TASC proposal or to find more
about the program, contact the USDA-FAS Programs Operations Division,
Grant Programs Branch; by phone: (202) 720-4327; e-mail:
[email protected]; or the Internet at: http://www.fas.usda.gov/mos/
tasc/tasc.asp.
Information on FAS programs, trade data and reports are available
by accessing the FAS Home Page at: http://www.fas.usda.gov.

Fiscal Year 2010 Technical Assistance for Specialty Crops Program
Allocations
------------------------------------------------------------------------
Participant Project Title Amount
------------------------------------------------------------------------
Almond Board of California European Union Health and $24,750
Port Authorities Seminar
and Tour
Bryant Christie, Inc. Maximum Residue Level $450,662
Database Funding for
Specialty Crops and
Hawaiian Papayas
California Citrus Quality California Navel Valencia $124,562
Council Exports to Korea Program,
Korea Inspectors' Visit
California Department of Food Minimizing Trade Barriers $500,000
and Agriculture through Field Surveys for
the European Grapevine
Moth
California Dried Plum Board Retaining Export and Food $1,458,772
Security of U.S.
Specialty Crops: Low-
Emission Methyl Bromide
Fumigation for Quarantine
and Pre-Shipment Uses
California Fig Advisory Board Encourage Japanese $100,000
Government To Allow
Potassium Sorbate
Treatment on High-
Moisture Figs
California Grape and Tree Fruit To Develop Efficacy Data $54,388
League Through a Pilot Systems
Approach for Peach Twig
Borer for U.S. Stone
Fruit to Australia
California Pistachio Export Improve Navel Orange Worm $1,195,500
Council Control in Pistachios To
Overcome Sanitary and
Phytosanitary Barriers in
Major Export Markets
California Specialty Crops Global Maximum Residue $98,000
Council Levels Engaging Specialty
Crops in Priority
Setting, Planning, and
Compliance
California Strawberry Spotted Wing Drosophila $46,989
Commission Impacts in Strawberry
Exports
California Table Grape Post-Harvest Control of $90,000
Commission Light Brown Apple Moth on
Fresh Grapes
California Table Grape Export Australian Phytosanitary $150,000
Association Preclearance Program
California Walnut Commission Development of Technical $66,836
Brochures
Citrus Research Board of Mortality of Asian Citrus $216,303
California Psyllid, Diaphorina
Citri, in California
Citrus During Packaging
and Export to Australia
Florida Citrus Packers Determination of Canker $489,447
Survival and Transmission
via Canker-Blemished
Fruit Relative to
International Market
Access
Florida Fruit and Vegetable Management, Maintenance, $389,464
Association and Expansion of the U.S.-
Canada Pesticide
Harmonization Database
Georgia Peach Council/South Export of Fresh, Systems- $240,000
Carolina Peach Council Protected Georgia and
South Carolina Peaches to
Mexico
Indian River Citrus League Best Post-Harvest Handling $120,000
Practices to Assure
Canker-Free Fresh Citrus
Fruit Exports
Northwest Horticultural Council Changing India's $66,060
Phytosanitary Access
Requirements for Pacific
Northwest Cherries; OFM
Monitoring and
Verification at Origin
Program for the Export of
Peaches and Nectarines to
Mexico; Study of
Potential Health Effects
Associated with the Use
of Wax Coatings on
Produce
Rutgers University, IR-4 Actions To Facilitate $627,199
Project Global Maximum Residue
Levels for Priority Use
on Specialty Crops
U.S. Apple Export Council Apple Maggot and Other $158,122
Pests of Concern-
Identification Treatment
Methodologies and Data
Collection
USDA, Agricultural Research Classical Biological $155,710
Service Control of the Invasive
White Peach Scale on
Papaya in Hawaii;
Phosphine Fumigation
Treatment for Post-
Harvest Inspect Control
on Lettuce; Evaluating
the Efficacy of Systems
Approach Components for
the Western Cherry Fruit
Fly
USDA, Animal and Plant Health Development of Irradiation $175,000
Inspection Service (APHIS) Treatment for High-Impact
Invasive Species and
Evaluation of Commodity
Tolerance to Irradiation
Treatments
USDA, APHIS, Center for Plant Development of $165,000
Health Science and Technology Infrastructure and
(CPHST) Capacity for U.S. Export
Specialty Crops
Irradiation Treatments
USDA, APHIS, Plant Protection A Prototype Electronic $133,907
and Quarantine and CPHST Identification Resource
To Support Agricultural
Commodity Trade:
California Table Grapes
Washington State Department of Establishment of Japan $38,000
Agriculture ``Import Tolerance''
Maximum Residue Level for
Bifenezate in Red
Raspberries
------------------------------------------------------------------------
Total $7,334,671
------------------------------------------------------------------------

______

Quality Samples Program
The Quality Samples Program (QSP) helps U.S. agricultural trade
organizations provide samples of their agricultural products to
potential importers overseas.
Focusing on industry and manufacturing, as opposed to end-use
consumers, the QSP permits potential customers to discover U.S.
quality. The QSP also allows manufacturers overseas to do test runs to
assess how U.S. food and fiber products can best meet their production
needs. In 2010, the U.S. Department of Agriculture (USDA) provided
allocations totaling about $1.9 million to trade associations and state
agricultural organizations under this program.
How the program benefits U.S. agriculture: QSP stimulates interest
and demand for U.S. agricultural products. Increased opportunities for
agricultural exports ripple throughout the U.S. economy.
How the program works: Each year, USDA announces an application
period for participation in the QSP, publishing it in the Federal
Register. Trade organizations and private firms can submit QSP
proposals to USDA as part of the Unified Export Strategy (UES).
QSP applications undergo a competitive review process based on
criteria specified in the Federal Register announcement. Participants
approved for QSP funding obtain commodity samples, export them and
provide the importer the technical assistance necessary to use the
sample properly. When a project is finished, USDA reimburses the
participants for the costs of procuring and transporting the samples.
The technical assistance component is a requirement of the program but
is not reimbursable under the QSP.
USDA's Commodity Credit Corporation (CCC) funds the program, which
is authorized under the CCC Charter Act.
What commodities are covered: USDA has approved QSP proposals to
promote a wide variety of U.S. commodities, including wheat, citrus,
cranberries, mohair, hides, rice, and soybeans. Many other commodities
are eligible.
Additional Information: To submit a QSP proposal or to learn more
about the program, contact the USDA-FAS Program Operations Division,
Grant Programs Branch, Phone: (202) 720-4327, Fax: (202) 720-9361; E-
mail: [email protected], Internet: http://www.fas.usda.gov/mos/
programs/QSP.asp.
Information on FAS programs, trade data and reports are available
by accessing the FAS Home Page at: http://www.fas.usda.gov.

Fiscal Year 2010 Quality Samples Program Allocations
------------------------------------------------------------------------
Participant Market(s) Amount
------------------------------------------------------------------------
Alaska Seafood Marketing China $28,000
Institute
American Sheep Industry China, Eastern Europe, $365,000
Association India, Mexico, Western
Europe
American Soybean Association Ghana, Palestine $47,000
California Agricultural Export China $300,000
Council
California Walnut Commission China $25,000
Cranberry Marketing Committee Austria, France, Germany, $72,000
Korea, Mexico,
Netherlands, Spain,
Switzerland
Ginseng Board of Wisconsin China, Korea, Japan, $170,000
Taiwan,
Hop Growers of America Brazil, China, Germany, $5,000
Russia
Mohair Council of America China, India, South Africa, $225,000
South America, Southeast
Asia, Western Europe
National Potato Promotion Brazil, Central America, $455,000
Board China, Egypt, Indonesia,
Japan, Malaysia, Mexico,
Nicaragua, Philippines,
South Korea, Sri Lanka,
Sub-Saharan Africa,
Thailand, Vietnam
U.S. Grains Council Egypt, Saudi Arabia $66,500
U.S. Livestock Genetics Russia $64,100
Export, Inc.
U.S. Wheat Associates Morocco $66,740
------------------------------------------------------------------------
Total $1,889,340
------------------------------------------------------------------------

Thank you, Mr. Brewer. Let me just ask an initial question, and I will
let you use it as a springboard to answer it in whatever way you

think is appropriate. As you know, the blueprint for Fiscal Year 2012 spending has been unveiled this week, as a matter of fact, probably
will come to the Floor next week. From a standpoint of expenditures and
from a standpoint of what your agency realizes in terms of revenues to
the government, I don't want to focus on the budget so much as I want
to focus on what you do, what it costs, and what it brings in to our
collective Federal entity here.
Mr. Brewer. Mr. Chairman, if I understand your question correctly,
you want to know exactly what are the benefits of each of the programs?
The Chairman. No. I guess I want to know in bigger terms whether
what you are doing you believe ultimately produces revenue for us. I
guess I am looking through to see what the real cost benefits are of
your program. I think we know what the benefits are to our agricultural
sector. Do you also see those benefits streaming through, so to speak,
in an economic sense?
Mr. Brewer. Yes, sir. Certainly. I think what I would start with is
that the benefit of these programs certainly is American jobs. For
example, the MAP Program. An Oregon softwood producer out on the West
Coast participated in one of our programs, which was a trade mission
that was funded by MAP Programs. Through the contacts that that
manufacturer made, they were able to secure contracts of over $3
million. That $3 million was able to keep a mill that was scheduled to
be closed, open, saving 65 American jobs.
Another example would be probably the tax base that is helped by
the programs and the private sector initiatives that we have with our
partners that brings in income to our farmers and ranchers, which, in
turn, works into the economy and grows.
The Chairman. One of the concerns that has been raised by the
people analyzing the program is that the President's new initiative
essentially takes programs that were already doing pretty effectively
and gives them a new name and that as a matter of fact, there may be
the potential for duplication in that area.
What would you respond to those critics?
Mr. Brewer. Well, sir, I will take your question in two parts
because it sounds like there is an NEI component to it, the National
Export Initiative, component to it and then just an overall question of
duplication.
Regarding duplication, we do not see that in our export promotion
programs. Each program is designed to deal with a particular challenge
to Americans trying to export their products to foreign markets. When
you put them together, they also form a very comprehensive and
effective tool to, again, meet challenges that may face U.S. exporters.
For example, one thing that our cooperators, the U.S. Hay
Association, is doing is they used our Quality Samples Program to
introduce into the Chinese market U.S. hay. Building on that
introduction of samples of our product, we were then able to move into
using FMD Programs, Foreign Market Development Programs, to stay in
that market and to build a market share and to gain market share for
U.S. hay in the Chinese market. So they really compliment one another
and build to be effective tools.
The Chairman. My last question would be that we have heard, and I
assume you have from the industry sector, if you will, about some of
these proposed changes to MAP and FMD. Is it your intention and have
you implemented some of those suggestions and ideas from industry
participants to modify your original announcement and what you are
trying to do?
Mr. Brewer. Sir, the short answer to your question is, no, nothing
has been implemented. What we want to do is: MAP and FMD are
longstanding programs with a very strong participation by our
cooperators. What we want to do--but we are always looking for ways to
improve the programs, for ways to do things better. So what we wanted
to do was we wanted to start a conversation about how can we improve
MAP. We have had that conversation. It is an ongoing conversation with
our stakeholders and our cooperators. We have also come up here on the
Hill and briefed and gotten engaged in consultations with Congressional
staff on this. So it is an ongoing conversation. Any possible changes
or improvements to the program will not be implemented without
consultation with our partners and with Congress.
The Chairman. With that and my time having expired, I recognize the
Ranking Member, the gentleman from California, Mr. Costa.
Mr. Costa. Thank you very much, Mr. Chairman.
Mr. Brewer, as we are obviously looking at trying to get our
nation's fiscal house in order and budget constraints and reducing our
deficit, we know that that is going to require cutting back on a host
of programs. So as we look at the reauthorization of the 2012 Farm
Bill, which I would argue has actually cost less than was anticipated
when we authorized it in 2008, and we should be mindful of that, that
we look where we get the best bang for our buck, especially in the
Title I Programs.
The Market Access Program that I am familiar with, and that you
deal with, has been effective, but it has also been criticized as a
corporate welfare for large for-profit corporations like McDonald's,
Mars, et cetera.
What would be your response to that statement?
Mr. Brewer. Congressman, thank you for your question. Sir, my short
answer to that statement would be that it is simply incorrect. By
statute large corporations are prohibited from participating in the MAP
Program.
Mr. Costa. Good. Let us underline that. By definition they are
prohibited.
Mr. Brewer. They are prohibited by statute to participate in this
program, in the MAP Program. This program is directly targeted to
nonprofit trade organizations, to agricultural cooperatives, to our
nonprofit state regional trade groups, what we call our SRTGs. Those
SRTGs, they represent not only multiple states but also hundreds of
small and medium-size businesses.
Mr. Costa. And it does exactly what it defines. It attempts to try
to provide greater market access to markets that otherwise we have
difficulty in penetrating.
Mr. Brewer. That is correct, Congressman.
Mr. Costa. Let me go on because there are some other areas, and my
time is limited. The Technical Assistance for Specialty Crop Program,
obviously, is big in California with over 300 specialty crops. But,
other parts of the South, West, the Northeast, in Michigan, other
places, the 2008 Farm Bill authorized funding for the Technical
Assistance for Specialty Crops at $4 million for Fiscal Year 2008,
increasing it incrementally up to $9 million in 2011 and 2012.
How has this increased funding been allocated?
Mr. Brewer. Sir, the TASC funds are being obligated now. We are
getting applications in, and they are being obligated. If I can step
back and just give a little sense of what TASC is because it hits on
what you have touched on in your statement.
Mr. Costa. Quickly because I have other questions.
Mr. Brewer. I am sorry. The TASC funds are being obligated now to
our applicants.
Mr. Costa. Okay, and for which countries and for which commodities
do you think this is most effective in breaking down the technical
effort for issues with restrictions for animal restrictions or food
restrictions? Give some examples.
Mr. Brewer. Yes. We have had a number of successes with regard to
TASC. Just a couple of examples are TASC funds have been used to
develop a pre-clearance program for table grapes, helping us export
into the Australian market. We have also used TASC funds or I should
say our cooperator, the U.S. Potato Board, has used TASC funds to
establish a U.S. Thailand seed potato protocol to address SPS and TBT,
which stands for Technical Barriers to Trade, concerns. That led to the
Thai market opening up for seed potatoes, and that market is valued
between $3 and $5 million.
Mr. Costa. Let me go finally, as my time is almost gone, the
President in his State of the Union talked about streamlining
government and focusing on the Executive Branch. Can you provide any
recommendations that you folks are looking at within your area in which
reorganization will take place under the Executive Branch effort, areas
that involve foreign agricultural services with the U.S. trade
agencies?
Mr. Brewer. Well, sir, regarding trade agency consolidation, we
certainly support the President's effort to find efficiencies in
government, and USDA is engaged in that effort. Secretary Vilsack has
met with OMB on this subject. My agency has participated in
Administration discussions on consolidation as well.
There are, however, unique challenges in trade of ag products that
require technical expertise that is not normally housed in a trade
agency. One thing that has really helped FAS succeed in our mission has
been our long history of contact and connection with the ag community
as well as the way we are able to work very collaboratively with other
elements in USDA. I am referring to APHIS and FSIS.
We want to make sure that is preserved in any future discussions.
Mr. Costa. Well, Mr. Chairman, thank you. My time has expired, but
I would also suggest that you take the input, if you are not, and I
suspect you are, from the private sector as you look at this
reorganization and greater efficiencies because I know they work hand
in hand with you and as we try to gain greater access to foreign
markets, and their suggestions on reorganization could be helpful.
Mr. Brewer. Certainly are doing that.
Mr. Costa. Yes, sir. Thank you.
The Chairman. The chair would recognize the gentlelady from
Missouri, Congresswoman Hartzler.
Mrs. Hartzler. Thank you, Mr. Chairman. Thank you, Mr. Brewer.
I just wanted to ask some questions about the foreign service
officers. What is the unique role of the foreign service officers
stationed in like U.S. embassies?
Mr. Brewer. Yes, Congresswoman, thank you for your question.
Our foreign service officers, our ag attaches stationed around the
world are really our first responders when it comes to trade
disruptions. They are on the ground, they are providing us with
information that is just extremely valuable for us back here in
Washington.
A couple of examples that would show the value that they bring in
both Taiwan and South Korea. There was cherry deliveries that were held
up over pesticide residue concerns by the Koreans and the Taiwanese.
Those deliveries were worth $7 million. Our folks were able to get on
the ground to work with their counterparts in those governments and get
those things released, get those cherries released, that product
released before they perished. That was a highly-perishable commodity,
and by us being on the ground, being there, having the connections that
we had we were able to get those released.
So that is just one example of how being that first responder is
very valuable.
Mrs. Hartzler. Sure. How many countries are they in right now? How
many embassies have foreign----
Mr. Brewer. We have about 99 offices around the world, but we
cover, again, as I said in my statement, about 156 different countries.
Mrs. Hartzler. Great. How would they help overcome trade barriers
that are out there?
Mr. Brewer. Well, again, it would be their presence on the ground,
their contacts with their counterparts within the embassies, their
ability to help us monitor and enforce agreements that we have or have
made, be it MOUs right up to various other trade agreements. So just
being there on the ground, knowledgeable of the culture and the country
that they are working in, as well as knowledgeable about the priorities
here in the United States and what we have in our agricultural
strategy. They are also on the ground to work closely with our
partners, the cooperators have, many of them have foreign offices so
there is that contact there. So just that communication, collaboration,
access is something that really helps us.
Mrs. Hartzler. There is a problem as you probably are aware of
counterfeiting of U.S. brands, and I just wondered what is FAS doing to
coordinate with the EMP and participants to protect U.S. brands and
prevent counterfeiting.
Mr. Brewer. Congresswoman, I don't have a very good answer for you
for that specific issue, but I will ask my staff. I can have my staff
get back to you to talk specifically about counterfeiting.
Mrs. Hartzler. Okay, and the last part of my question, I guess,
just real practical. I have just been here 3 months, a farm background,
and my husband and I farmed, been involved with that. But say there is
a company in the 4th district of Missouri that wants to promote their
product, an ag-related product overseas, there may be a small business,
they have an idea. They want to export it.
What services could your department provide that would be helpful
to them that I could connect them with?
Mr. Brewer. Yes, ma'am. We have a host of services that could
certainly help anyone interested in exporting overseas. In fact, that
is one of the major goals of the National Export Initiative to increase
the participation of that. I think first thing probably would be to
visit our website. We certainly have contact names there, Office of
Trade Programs can certainly be of great help. Again, through the NEI
process we are working and communicating, collaborating with the
Commerce Department, with the Small Business Administration, we are
building a system of where if someone goes to those entities there is a
system of getting them to us, and vice versa, if there is something
that is more appropriate for those agencies, we can get it to them.
So there is really a system being built up, but I would start with
our website would be a place to go.
Mrs. Hartzler. Very good. Thank you very much. Thank you, Mr.
Chairman.
The Chairman. The chair would recognize the gentleman from North
Carolina, Mr. Kissell.
Mr. Kissell. Thank you, Mr. Chairman, and thank you, Mr. Brewer,
for being with us today. You had talked about in your opening remarks
the significant increases in exports in ag products. Very briefly,
where would you attribute the export coming from any particular
segments of agriculture, and what forces overseas have led to this, and
just kind of how did we get to those increases?
Mr. Brewer. Congressman, our top markets are China, Canada, Mexico,
Japan, and the EU. So a lot of the interest from those countries are
really driving a lot of the exports we have. Our top markets, I would
say our top commodities are soybeans, cotton, wheat, and I am not
putting them in any particular order, but fruits and vegetables, et
cetera. There is a great deal of product going to China, and that is
driving a lot of our successful numbers, as well as our success through
these programs of knocking down barriers.
I mentioned the cherry issue in South Korea and Taiwan. We also
have been working with the Chinese. They had some concerns about the
quality and safety of our soybeans. We were able to go through our FMD
Program, we were able to work an MOU with them that addressed their
concerns and kept that flow of soybeans going to China.
I think the combination of just a greater demand from our major
markets as well as the efficient way that we are administering these
programs to knock down trade barriers to open up those markets is
really the combination that is leading us to those high numbers.
Mr. Kissell. Is there any concern as we see rising food prices and
high food prices, is there any concern that we are creating a demand
that will drive food prices up, and then do we have the supply to be
able to fulfill what we are trying to do overseas? And we are glad to
have the good income from our farmers, but, this supply and demand
thing keeps coming back, too. Is there any concern that we will be
generating demands that will outstrip supply and therefore create
problems on the pricing side?
Mr. Brewer. Well, sir, in my agency one of the program areas that
we have is our Office of Global Analysis. They do a lot of market
analysis, a lot of crop production analysis, looking at those issues.
We don't believe that our success in exporting our products is leading
to any kind of price volatility of any kind, but we are working closely
with other elements with USDA. I should say we are following the work
of other elements within USDA, particularly the Economic Research
Service and the World Board that are following these kinds of issues
and keeping us abreast of whether something is going on that we are not
aware of.
But at this point we don't believe that our exports are causing any
problems with that.
Mr. Kissell. And in the area of government efficiencies, I know in
talking with some folks in Commerce, they also are stressing exports as
many people are. Do you find opportunity to work with other departments
and programs they might have, and do you know what programs we might
have that there might be duplications of?
Mr. Brewer. Sir, through the National Export Initiative as I
mentioned a couple of times before, we are really working with, the
Administration has really reinvigorated the President's Export Council,
the Export Cabinet, a lot of communication, a lot of collaboration
going on to make sure that the various parts of the Federal Government
involved in this area are working together, are communicating, and
really complimenting one another's missions and goals.
That has been extremely helpful in not only helping us target
particular markets to get in those markets, opening them up, and get
U.S. products in there, but also to streamline and become more
effective as a government, as a Federal Government in this area of
trade and exports.
I think we are doing much more complimenting of our services to
move forward than duplication.
Mr. Kissell. Thank you, sir. Thank you, Mr. Chairman.
The Chairman. Thank you, and the chair would recognize the
gentleman from Georgia, Mr. Scott.
Mr. Scott. Thank you, Mr. Chairman. Mr. Brewer, thank you so much
for joining us, and some of my questions revolve around what Mr.
Kissell had to ask, but just let me go back to the statement. The
President's National Export Initiative goal is to double all U.S.
exports within 5 years, and I certainly think that that is a good goal
for our country and hope that we are able to reach that, and I know
that you and this Committee will be a big part of that if we are able
to reach it.
My district in Georgia, the 8th district, has a wide variety of
crops. We are always looking for opportunities to improve the markets
and expand our ability to trade internationally, and I know you talked
about the current countries with Mr. Kissell's question and current
crops.
My question is future countries and future crops. What future
countries do you see the U.S. increasing trade with over the next
couple of years?
Mr. Brewer. Congressman, that is a very good question. Let me step
back and give you one of the activities that we do within the agency to
help us, again, streamline and stay efficient and stay at a very
effective working level is something we call the global review. We
look, annually, at our footprint around the world, where we have
offices, and adjust as necessary, just make sure that we are where the
best places are for us to be in order to promote agricultural exports.
As I said, that is an annual review. I would say that some of the
places that have been identified where we provided the budget is there
to do so, but we are constantly adjusting. Where we see ourselves
being, we just recently have opened offices in Africa, Ethiopia, we
think Angola is a place that has growth potential, certainly doing more
activity in the southern region of Africa, south Africa, Kenya. In Asia
we are looking at more offices in China because, again, they are our
largest competitors to expanding there. We are constantly looking
through that global review and through the work of our attaches on the
ground trying to find where is that next country. But right now I would
say Angola and China, et cetera, would probably be it.
Mr. Scott. I mean, again, getting back to the goal of doubling our
exports within 5 years, the Columbia Free Trade Agreement, the Panama
Free Trade Agreement, the South Korea Free Trade Agreement, I am
someone who personally believes all of those things would help us
achieve what the President says the goal is, and yet he has not done
anything with those agreements yet.
So what can we do together to help get these trade agreements
passed so that we can start working towards that path of doubling those
exports?
Mr. Brewer. Congressman, let me start off by saying just flat out,
the three FTAs are good for agriculture. All three of them are very
good for agriculture. The trade agreements knock down tariffs to U.S.
products that help us get in those markets quickly. For example, in
South Korea with the passage of that agreement that will give us
greater access to Korea's $1 trillion market economy and their 50
million consumers, or almost 50 million consumers.
The International Trade Commission, the ITC, believes that once it
is fully implemented it will add $2 to $4 billion to U.S. exports.
So it is a very solid commitment. The Korea Agreement is ready to
go. I am sure it will be forwarded to Congress soon. We have made
progress on the Columbia Agreement. There is a path forward for that,
so I am fully confident that will come up, so they are on their way.
Mr. Scott. I apologize for interrupting you, but I am about to run
out of time. I want to express, and so I apologize for the
interruption, but I want to express one concern I have, and certainly
we want to get rid of duplicative agencies and things along those
lines. But, I do want to make sure that when it comes to agriculture
and agriculture trade, it is handled through the USDA and not any other
agency, and Mr. Chairman, with that statement, again, Mr. Brewer, I
apologize for the interruption of your answer, but I am out of time.
Mr. Brewer. Yes, sir.
Mr. Scott. Thank you.
Mr. Brewer. No problem.
The Chairman. Thank you, Mr. Scott. The chair recognizes the
gentleman from Texas, Mr. Cuellar.
Mr. Cuellar. Thank you very much, Mr. Chairman, for holding this
meeting.
Mr. Brewer, can you explain what impact the dispute that we have
had with the Republic of Mexico with the trucking issue has had? As you
know, the trucking issue was part of NAFTA, and the U.S. didn't keep up
its part of its deal. The Mexicans then came back and added tariffs to
hit the ag folks. I certainly want to thank President Obama, President
Calderon and Secretary LaHood for making this--hopefully at least to
have an agreement and concept, but could you tell us what sort of
impact that had, I mean, on our exports? We are exporting to Mexico. I
know there is a lot of ag products that we export, and what sort of
impact does it have on us because of the tariffs, and hopefully if the
agreement goes through, they will eliminate the tariffs and we go back
to the way it was.
Mr. Brewer. Congressman, thank you. Regarding the trucking issue,
it certainly did have an impact on agricultural exports. As you know,
in response to the refusal of the Mexican trucks coming in, they had a
series of tariffs on a variety of products. A number of them were
agricultural products. It did reduce the amount of product that we had
going in there. We did lose some market share, but as you said in your
comments, we are very excited and happy about the agreement, and it is
moving forward.
Secretary LaHood and the Transportation Department is certainly
point on that along with the State Department, and they appear to be
moving quickly to try and resolve this issue and with its resolution
that will allow us to recover what we had due to the problems caused by
the increase in tariffs on agriculture.
Mr. Cuellar. All right. Thank you very much. Thank you, Mr.
Chairman.
The Chairman. Thank you. The gentleman from Pennsylvania, Mr.
Thompson.
Mr. Thompson. Mr. Brewer, thank you so much for being here, for
your testimony, and your service. As you mentioned before and it has
been mentioned a number of times about the President's National Export
Initiative goal of doubling U.S. exports within the next 5 years, my
first question is in terms of agriculture, looking at agriculture, is
that within reach for us within the next 5 years? Is it going to be
relying basically on what we have been doing, or are there new things,
new initiatives that we are going to have to roll out, either through
Congress or certainly administratively to achieve that goal?
Mr. Brewer. Congressman, just to step back quickly to really make
sure we are on the point of the National Export Initiative, it really
is national. It is across the Federal Government. It is not just ag but
all sectors to increase that, and that doubling is for everybody. So we
certainly play a role in that.
Mr. Thompson. Oh, I understand that, but I joined the Agriculture
Committee for farmers, so I am here to talk about ag.
Mr. Brewer. Exactly right. We believe that it is an achievable
goal. We certainly at USDA and within FAS through these export
promotion programs as well as the other tools available to us,
certainly are doing all we can do on our part in order to achieve that
goal. Within the President's 2012 budget there is a request for $20
million to assist us in our NEI efforts. What we would like to do with
that money is monitoring and enforcement of international trade
agreements, making sure that our partners do what they have agreed to
do with regard to market access, et cetera. We believe that those extra
funds will go a long way in helping us do that monitoring and
enforcement. Other goals of those funds are to increase the trade
missions that we have, to streamline our certification process, making
it more electronic, and just to speed up the process of where our
farmers and ranchers can export, and certainly to increase the
assistance that we provide to help them get in there.
Again, what we are looking at is really to help our small and
medium-sized businesses to get into the export business, get into those
foreign markets. If they are in one market, get them into two. Just
really pushing that goal of being an exporter, and those NEI funds will
help us achieve that goal.
Mr. Thompson. All right. When you are involved in those discussions
in that work, how sensitive is the issue of cost, production costs,
which is obviously the cost that our agriculture community experiences,
the cost that is only placed on those commodities to be sold in trade.
Do you find that that is sensitive? How sensitive is that? How
often does that issue come up?
Mr. Brewer. Congressman, let me make sure I understand your
question. You are talking about the cost for the farmer and rancher to
produce what he is----
Mr. Thompson. Which ultimately results in the cost, the price
placed for sale of that commodity, and do you find situations where we
are just not competitive in terms of the cost for commodities that we
are trying to place in trade to other countries?
Mr. Brewer. For what we are doing, sir, where we focus on is really
the exporting of those commodities and how can we assist in getting
that commodity out into a foreign market. We are hopeful that we get it
at the right price, we give these opportunities to sell more, that it
will assist in allowing the farmer and the rancher to be able to afford
what inputs he needs in order to produce that.
So we are really focused on assisting the farmer and rancher in the
way of giving them access to new consumers and new markets in order to
sell his product, in order to thrive in his business.
Mr. Thompson. Okay. Thank you, Mr. Brewer. Thank you, Chairman.
The Chairman. The chair will recognize the gentlelady from Alabama,
Ms. Sewell.
Ms. Sewell. Thank you, Mr. Chairman.
Mr. Brewer, on February 18 the USDA released recommendations for
implementation of a law requiring tough new inspection and regulation
of catfish all across America. The proposed rule transfers the
inspection and regulation of catfish from the FDA to the USDA.
My particular district is the second largest American producer of
catfish in Alabama, where I reside, and the proposed regulation is a
step in the right direction. I know that we are currently in a 120 day
comment period and just really wanted to know what kind of comments, to
the best of your knowledge, that we have been receiving and where do
you see that direction of that regulation going?
Mr. Brewer. Congresswoman, thank you. As you are well aware of,
FSIS is really the agency of jurisdiction over that, so I really don't
have a lot of comment on that. As you rightly say, we are in the public
comment period. That period ends late June, around June 24, and all
aspects of the rule are being looked at and commented on during this
period, right up to and including the definition of catfish. So that
process is ongoing.
I will take this opportunity, though, to let you know that the
Catfish Institute is a cooperator, is participating in our MAP Program,
and they have been using our export promotion programs to market
American catfish into Canada, and they are having some success in that.
So I want to bring that in and just let you know that on that end that
we are having some progress there.
But FSIS is really the lead on the rule.
Ms. Sewell. Right. Do you foresee that the regulation once the
comment period is over would come out more immediately, or where do you
see your agency in assisting the catfish industry generally?
Mr. Brewer. I cannot comment on the impact of the rule or any of
that, I wouldn't have that, but we certainly are prepared to use our
export promotion programs that we administer to assist getting catfish
into foreign markets, wherever it might be a popular place for it.
So we stand ready to handle that on that trade aspect to really
help in any way we can to get those products into foreign markets.
Ms. Sewell. Great. Thank you, Mr. Brewer.
Mr. Brewer. Yes.
The Chairman. The gentleman from Indiana, Mr. Stutzman.
Mr. Stutzman. Thank you, Mr. Chairman, and thank you, Mr. Brewer,
for being here.
Could you comment a little bit about China. They continue buying
corn from us. Is that going to continue to grow? I know they are
obviously a growing economy, and how does that affect our markets here?
And then also if you could comment a little bit about how ethanol
plays into our production as far as competitiveness with exports to
China and other countries.
Mr. Brewer. With regard to your question about China, as I
mentioned earlier, China is certainly our number one market for our
products. It is a market that we are having some success in. Clearly it
is our number one market, but it is one that requires constant
monitoring, constant activity, and to make sure that market stays open.
Again, it goes back to the value of our foreign service, of our ag
attaches being on the ground, opening up opportunities for U.S.
products to be sold. I think one example of the success we are having
there is that recently a supermarket chain in China has been for the
second year in a row and we hope for a third year is having a focus on,
I guess, an American food show. They are highlighting and really
bringing attention to American products to their customers, and they
have been able to introduce over 60 new products and during that show
we have had thousands of dollars in sales.
So not only is it bringing income, it is really starting to build
the American brand among the Chinese consumer. So we are having a lot
of success there, but as I said, constant vigilance is what we need.
Your question of ethanol, I am sorry, you wanted to know how is it
helping or----
Mr. Stutzman. Yes. How is that playing with your ability to sell
our commodities to foreign markets and the competition with ethanol
domestically? Commodity prices are higher now than they have been in a
long, long time, maybe ever. Are you finding it difficult to have the
ability to have resources or the commodities here to go to China and
other countries and say we have the products. Is ethanol biting into
that at all?
Mr. Brewer. Congressman, I am not aware of that. As I mentioned to
Congressman Kissell, we are enjoying record sales abroad, sales of our
commodities. We are certainly monitoring the market, but we are not
finding any kinds of shortages of access to that, but I don't have that
kind of information at my fingertips, but I would certainly be happy to
take that back and find----
Mr. Stutzman. Sure. One other question, and you kind of alluded to
it, is could you describe the background and the training that USDA
requires for your FSOs and their effectiveness in promoting U.S.
exports? Are we bringing buyers to the United States and giving them
reasons to buy from us? What is that relationship, and how does that
relationship work?
Mr. Brewer. Yes, sir. We are certainly through our MAP Program, we
are doing a number of trade missions; both having American companies
and sellers going over to that country to describe their products. We
are also having trade missions coming here.
In fact, one of them that is probably of interest to Mr. Scott,
Congressman Scott, is a store we have been doing with one of our
participants, the American Peanut Council. The Peanut Council in 2007,
used MAP funds to go over to Japan, and while they were there to meet
with the group of Japanese importers and other buyers about peanuts. In
part through that, sales went up, increased by 75 percent of American
peanuts into Japan. In 2010, we did the reverse. MAP funds were used to
bring Japanese buyers to Georgia to look at the product and look at how
peanuts are grown, and that effort led to now where we have captured
about 35 percent of the Japanese market in peanuts.
So that is just one example of how, yes, we are going over there,
and we are bringing folks here in our efforts to increase U.S. exports.
Mr. Stutzman. Okay. Thank you. I yield back.
The Chairman. Thank you. That concludes the first set of questions.
If any of my colleagues have anymore questions, I would be more than
happy to allow it, but I think that is probably an appropriate place to
thank Administrator Mr. Brewer for your testimony, your responses to
our questions, and your service to our agricultural sector and our
country. Thank you very much.
Mr. Brewer. Thank you very much.
The Chairman. With the understanding that we could have votes in
the relatively near future, I think we ought to proceed with the next
panel, second panel, with their understanding that we could be
interrupted during the course of either your testimony or your
responses to our questions. I hope that you will be able to be patient
with us in meeting our other obligations.
Gentlemen, ladies, I want to introduce four of the witnesses and
then I would like to defer to the Ranking Member for a specific
introduction of a fifth member with whom he has, through his state and
otherwise, a personal relationship and communication.
I just want to introduce each of you and then go back to the
beginning. Our first witness is Mr. Michael Wootton, Senior Vice
President Corporate Relations, Sunkist Growers, on behalf of the
National Council of Farmer Cooperatives and the Coalition to Promote
U.S. Agricultural Exports, Mr. Stephen Censky, Chief Executive Officer,
American Soybean Association, St. Louis, Missouri, Mr. Thad Lively,
Senior Vice President, Trade Access, U.S. Meat Export Federation,
Denver, Colorado, Mr. Tim Hamilton, Executive Director of the Food
Export Association of the Midwest USA.
And the Ranking Member would like to, and I would appreciate his
introducing the fifth member of the panel.
Mr. Costa. Thank you, Mr. Chairman. Mr. Nikolich is from Reedley,
California. He has been with Gerawan Farms for 25 years. He started his
career as an agronomist and pest management specialist, and he has
worked his way up as Vice President of Technical Operations for Gerawan
Farms, a family farming operation that has been in the Valley for many,
many years, and who we are very proud of.
Thank you.
The Chairman. Thank you, and we appreciate all of you being here.
I would recognize first the gentleman from the Sunkist Growers, Mr.
Wootton. We all have your written statements and since we are kind of
at a limitation here, it would probably be a good idea if each of you
kind of summarize that and let us get onto our questions. But proceed
as you wish.
Mr. Wootton.

STATEMENT OF MICHAEL J. WOOTTON, SENIOR VICE
PRESIDENT CORPORATE RELATIONS, SUNKIST GROWERS; CHAIRMAN, COALITION TO
PROMOTE U.S. AGRICULTURAL EXPORTS, SHERMAN OAKS, CA; ON BEHALF OF
NATIONAL COUNCIL OF FARMER COOPERATIVES

Mr. Wootton. Thank you, Mr. Chairman. I appreciate the opportunity
to be here today and thank Mr. Costa and the Members of the
Subcommittee for giving us this opportunity.
Sunkist is a 118 year old agricultural marketing cooperative owned
by and governed by about 4,000 citrus growers in California and
Arizona, and the average size of their production acreage is about 40
acres. So they are truly small family farmers.
Sunkist markets the citrus that they produce both in the domestic
and international marketplace under the Sunkist brand. Farmer
cooperatives across the country offer farmers an opportunity to market
their products and compete in a global marketplace. Cooperatives
through collective resources enable individual farmers who do not have
the resources or the production volume individually to access and
successfully compete in foreign markets with their U.S.-grown products.
The farm revenues and economic wellbeing of the agriculture sector
depend heavily on exports, which accounts for 25 percent of U.S. farm
cash receipts, provide jobs for over one million Americans, and make a
positive contribution to our nation's overall trade balance. Market
Access Program is an essential part of that effort.
As important as agriculture is to our balance of trade, unfair
trade competition from foreign sources remains a growing problem in
foreign outlets and in our domestic market. The inroads made by Spanish
Clementine Mandarins in our domestic market are illustrative. Spanish
producers assisted by EU Trade Promotion Initiatives and other forms of
subsidy assistance began shipping large volumes of mandarins into the
U.S. marketplace several years ago.
The scope and cost of their marketing activities has been notable.
Spanish exporters, which are producing citrus in a high cost, developed
nation, and incurring significant transport costs to move their
products thousands of miles to U.S. grocery stores, have been able to
deliver to U.S. consumers a product with extremely expensive packaging
and at competitive price against California citrus produced near Mr.
Costa's district.
These Spanish producers are not so competitive that they can defy
the rules and laws of economics. Their main advantage is very clear.
They are receiving extensive EU and national support to sell and
promote their product abroad. According to the EU's most recent WTO
notification, the EU is providing over $1.4 billion in marketing and
advertising activities to support its agricultural sector. Just last
month the European Parliament passed a resolution urging an increased
commitment and resources to this end. The EU and its 27 nation-members
are clearly persuaded that government-supported export promotion is
essential to growing exports in the agricultural arena.
The same thing can be said of China, and FAS has a report dated
last November that outlines the intervention and heavy involvement of
the Chinese Government in subsidizing its agricultural sectors.
Now, American agricultural producers are confident that their
ability to compete around the world based on quality, and in our case
at Sunkist an asset of brand identity, but we cannot compete against
foreign farmers standing on the shoulders of their national treasuries.
Our export programs have long recognized this reality. The
predecessor to the MAP Program, the Targeted Export Assistance Program
was a bipartisan program signed into law in 1985, by President Ronald
Reagan and expressly designed to counter unfair foreign activities.
Unfair foreign trading practices have grown over time, and MAP has been
the only means for many in American agriculture to counter the harm.
The program is efficiently administered on a cost-share basis with
farmers and other participants required to contribute up to 100 percent
match of their own resources, and the Administrator outlined the
eligibility requirements. By any measure MAP and other USDA trade
promotion programs have been tremendously successful and cost effective
in maintaining expanding U.S. agricultural exports, creating American
jobs, and strengthening farm income.
And this is documented also in a USDA-commissioned audit by IHS
Global Insight, which was commenced during the Bush Administration,
completed during the Obama Administration, and shows that investment
providing a 35 to 1 return.
The report also showed that from 2002 to 2009, export gains
associated with programs increased average annual farm receipts by $4.4
billion, net cash farm income by $1\1/2\ billion. It further confirmed
that due to the higher prices from increased demand abroad, U.S.
domestic farm support payments were reduced by roughly $54 million
annually, thus reducing the net cost of these U.S. programs.
The examples of Sunkist MAP success stories, my written testimony,
and others like them from a host of other cooperators are tangible
benefits of sound public policy. They have been made possible because
Congress in every Administration since Ronald Reagan have recognized
that global agriculture is heavily impacted by foreign governments.
American producers cannot succeed without a reasonable partnership
with our government, and to give up this supportive partnership is to
cede the playing field to foreign producers and the governments that
stand behind them.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Wootton follows:]

Prepared Statement of Michael J. Wootton, Senior Vice President
Corporate Relations, Sunkist Growers; Chairman, Coalition to Promote
U.S. Agricultural Exports, Sherman Oaks, CA; on Behalf of National
Council of Farmer Cooperatives
Good morning, Mr. Chairman, Ranking Member Costa, and Members of
the Subcommittee. My name is Michael Wootton. I am Senior Vice
President of Sunkist Growers, and am pleased also to be testifying as
Chairman of the Coalition to Promote U.S. Agricultural Exports and on
behalf of the National Council of Farmer Cooperatives.
On behalf of Sunkist's grower-members, and the more than two
million farmers and ranchers who belong to farmer cooperatives, I
appreciate this opportunity to submit testimony regarding our vital
export promotion programs, and respectfully request that this statement
be made part of the official hearing record.
Sunkist Growers is a 118 year old agricultural marketing
cooperative owned and governed by 4,000 citrus growers in California
and Arizona. The average size of their family farms is approximately
forty acres. Their Sunkist cooperative markets their citrus both in the
U.S. market and internationally under the Sunkist brand.
Farmer cooperatives across the country offer their farmers an
opportunity to market their products and compete in a global
marketplace. Cooperatives, through collective resources, enable
individual farmers, who do not have the resources or production volume
individually to access and successfully compete in foreign markets with
their U.S.-grown products. Earnings from these overseas sales then flow
back to the farmer-owners in the form of increased patronage dividends
and help lower our U.S. trade deficit.
The Coalition to Promote U.S. Agricultural Exports is a coalition
of over 150 organizations, representing U.S. farmers and ranchers,
fishermen and forest product producers, cooperatives, small businesses,
regional trade organizations, and the State Departments of Agriculture
(see attached). The Coalition believes the United States must continue
policies and programs that enable American agriculture to compete
effectively in a global marketplace still dominated by unfair foreign
subsidies and access restrictions.
The farm revenues and economic well-being of our agricultural
sector depend heavily on exports, which account for over 25% of U.S.
farm cash receipts, provide jobs for over one million Americans, and
make a positive contribution to our nation's overall trade balance. The
support provided by USDA's Market Access Program (MAP) is essential to
our export health.
As important as agriculture is to our balance of trade, unfair
foreign competition remains a growing problem in foreign outlets and
here at home. In the fruit and vegetable sector, for example, which
includes a large number of MAP cooperators, foreign competitors have
made extraordinary in-roads over the past decade. As a result of open
U.S. trade policies, half of all fresh fruits and vegetables consumed
in the U.S. are now of foreign origin.
The in-roads made by Spanish Clementine Mandarins in our domestic
market are illustrative. Spanish producers, assisted by EU trade
promotion initiatives and other forms of subsidy assistance, began
shipping large volumes of Mandarins into the U.S. market in recent
years. Their in-store promotions and attractive packaging enabled them
to seize a high-value share of the U.S. market and reduce returns for
American producers.
The scope and cost of their marketing activities has been alarming.
Spanish exporters, which are producing citrus in a high-cost, developed
nation and incurring significant transport costs to move their product
thousands of miles into U.S. grocery stores, have been able to deliver
to U.S. consumers a product with extremely expensive packaging at a
competitive price against California citrus produced near Mr. Costa's
district.
These Spanish producers are not so competitive that they can defy
the laws of economics. Their main advantage is clear: they are
receiving extensive EU and national support to sell and promote their
product abroad. According to the EU's most recent WTO notification, the
EU is providing over $1.4 billion in marketing and advertising
activities to support its agricultural sector. Just last month, the EU
Parliament passed a resolution urging the EU to commit even greater
resources to promote agricultural exports. The EU and its 27 nations
are clearly persuaded that government-supported export promotion is
essential to growing exports in the agricultural arena.
Other foreign competitors are funding large promotional activities
as well. USDA's Foreign Agricultural Service (FAS) issued a report late
last year on China's programs in this area. That report states that in
China, ``industry associations, most with government support, are
active in most areas, and their presence is often critical to
success.'' The report observes that in cases of runaway export success
stories out of China, the critical factor is usually a strong,
government-supported program.
American agricultural producers, including our 4,000 growers, are
confident of their ability to compete around the world based on quality
and, in our case, the asset of brand identity. But we cannot compete
against foreign farmers standing on the broad shoulders of their
national treasury.
Our export programs have long recognized this reality. The
predecessor of the Market Access Program, the Targeted Export
Assistance (TEA) Program, was a bipartisan program signed into law in
1985 by President Ronald Reagan and expressly designed to counter
unfair foreign activities. As unfair foreign trading practices have
grown over time, MAP has been the only means for many in American
agriculture to counteract the harm.
As a so-called ``green box program,'' MAP is among the few tools
specifically allowed under WTO rules to help American farmers and
exporters remain competitive in a global marketplace still dominated by
unfair foreign competition. Though MAP's authorization has been as high
as $325 million annually over the long life of this program, its
current funding level of $200 million annually was authorized nearly 10
years ago under the 2002 Farm Bill and saw no increase under the
current bill. The program is efficiently administered on a cost-share
basis, with farmers and other participants required to contribute up to
100 percent match of their own resources. Those participants can only
include small businesses, nonprofit U.S. agricultural trade
associations, nonprofit U.S. agricultural cooperatives and nonprofit
state-regional trade groups.
By any measure, MAP and other USDA trade promotion programs have
been tremendously successful and cost-effective in maintaining and
expanding U.S. agricultural exports, creating American jobs, and
strengthening farm income. A recent independent USDA-commissioned audit
of MAP and other USDA trade programs prepared by IHS Global Insight,
Inc. (the world's largest economic analysis and forecasting firm)
confirmed that MAP uses government funds to supplement, not replace,
industry funds. According to the report, the increase in market
development spending by government and industry from 2002-2009 enlarged
U.S. market share and increased the annual value of U.S. agricultural
exports by $6.1 billion. This equates to $35 in agricultural export
gains for every additional $1 expended, a 35 to 1 return on investment.
The report also showed that from 2002-2009, export gains associated
with the programs increased average annual farm cash receipts by $4.4
billion and net cash farm income by $1.5 billion. It further confirmed
that, due to higher prices from increased demand abroad, U.S. domestic
farm support payments were reduced by roughly $54 million annually,
thus reducing the net cost of these U.S. programs.
As noted, because, non-trade distorting market promotions are
permitted under WTO rules, and are not expected to be subject to
disciplines under any final Doha agreement, market promotion is
increasingly seen as a centerpiece of a winning agricultural strategy
in developed nations and developing ones alike. A great many competitor
countries have announced ambitious trade goals and are shaping export
strategies based on strong government promotion programs. European
countries are expanding their promotional activities in Asia, Latin
America, and Eastern Europe. Canada, Australia, New Zealand, and Brazil
have budgeted significant investments in export promotion expenditures
worldwide in recent years. And, even as market promotion programs
expand into global markets, a significant portion of foreign market
promotion money will continue to be carried out here in the United
States at our local supermarkets.
As an approved USDA Cooperator organization, Sunkist Growers has
seen first-hand how MAP can make a large difference in counteracting
the effects of this pervasive foreign assistance. With matching monies,
our MAP-funded activities increased lemon sales in Japan by 13.4% over
the life of the campaign, increased lemon sales in China and Hong Kong
in 2009 by 195% compared to 2008, and increased orange sales in
Singapore by 127% over the life of the campaign.
These examples, and others like them from a host of other
cooperators, are the tangible benefits of sound public policy. They
have been made possible because Congress and every Administration since
Ronald Reagan's have recognized that global agriculture is heavily
impacted by foreign governments. American producers cannot succeed
without a reasonable partnership with our government. To give up this
supportive partnership is to cede the playing field to foreign
producers and the governments that stand behind them.
If American agriculture is to remain globally competitive, the
Coalition to Promote U.S. Agricultural Exports believes the
Administration and Congress should ensure the strength of MAP and the
other valuable export programs as part of a robust trade component in
the new farm bill and encourage their aggressive utilization. We
further believe the current system of funding under these FAS programs,
based upon the competitive merit of each applicant proposal, works well
and should not be changed. We do not believe that targeting funds to
specific sectors is necessary or prudent.
Thank you again for the opportunity to testify today before the
Committee and for your leadership on U.S. agriculture exports. We ask
that the Market Access Program and our other vital FAS programs be
sustained to help ensure the competitiveness of American producers in
the increasingly competitive global marketplace.
Attachment

Coalition To Promote U.S. Agricultural Exports Membership
2011

Alaska Seafood Marketing Institute National Barley Growers Association
American Cotton Exporters National Cattlemen's Beef
Association Association
American Cotton Shippers National Chicken Council
Association
American Farm Bureau Federation National Confectioners Association
American Feed Industry Association National Corn Growers Association
American Forest and Paper National Cotton Council
Association
American Hardwood Export Council National Council of Farmer
Cooperatives
American Meat Institute National Farmers Union
American Peanut Council National Grange
American Quarter Horse Association National Grape Cooperative
Association, Inc.
American Seed Trade Association National Milk Producers Federation
American Sheep Industry Association National Oilseed Processors
Association
American Soybean Association National Pork Producers Council
Atlantic Seaboard Wine Association National Potato Council
Blue Diamond Growers National Renderers Association
Calcot, Ltd. National Sorghum Producers
California Agricultural Export National Sunflower Association
Council
California Apple Commission National Turkey Federation
California Asparagus Commission Nebraska Wheat Board
California Association of Wheat Nebraska Wheat Growers Association
Growers
California Association of Winegrape New York Wine & Grape Foundation
Growers
California Blueberry Commission NORPAC Foods, Inc.
California Canning Peach North American Millers' Association
Association
California Cherry Export North Dakota Grain Growers
Association Association
California Cling Peach Board North Dakota Wheat Commission
California Dried Plum Board Northwest Cherry Growers
California Farm Bureau Federation Northwest Horticultural Council
California Fig Advisory Board Northwest Wine Coalition
California Grape and Tree Fruit Ocean Spray Cranberries, Inc.
League
California Kiwifruit Commission Oklahoma Wheat Growers Association
California Pear Advisory Board Oregon Wheat Commission
California Pear Growers Oregon Wheat Growers League
California Pistachio Export Council Peace River Valley Citrus Growers
Association
California Plum Marketing Board Pet Food Institute
California Strawberry Commission Produce Marketing Association
California Table Grape Commission Shelf-Stable Food Processors
Association
California Tomato Farmers Softwood Export Council
California Walnut Commission South Dakota Wheat Commission
California Wheat Commission Southern Forest Products
Association
Cal Pure Pistachio, Inc. Southern U.S. Trade Association
Cherry Marketing Institute Sunkist Growers
CoBank Sun Maid Growers of California
Colorado Association of Wheat Sunsweet Growers, Inc.
Growers
Colorado Wheat Administrative Texas Cattle Feeders Association
Committee
Dairy Farmers of America Texas Wheat Producers Association
Dairylea Cooperative, Inc. Texas Wheat Producers Board
Distilled Spirits Council of the The Catfish Institute
United States
Florida Citrus Commission The Farm Credit Council
Florida Citrus Mutual The Popcorn Institute
Florida Citrus Packers Association Tree Top, Inc.
Florida Citrus Processors United Durum Growers
Association AssociationUnited Egg Association
Florida Department of Citrus United Egg Producers
Florida Fruit & Vegetable United Fresh Produce Association
Association
Florida Peanut Producers USA Dry Pea and Lentil Council
Association
Food Export Association of the USA Poultry & Egg Export Council
Midwest USA
Food Export USA--Northeast USA Rice Federation
Georgia Poultry Federation U.S. Apple Association
Ginseng Board of Wisconsin U.S. Apple Export Council
Gulf Citrus Growers Association U.S. Dairy Export Council
Hardwood Federation U.S. Dry Bean Council
Highlands County Citrus Growers U.S. Grains Council
Association, Inc.
Hop Growers of America, Inc. U.S. Hides, Skins & Leather
Association
Idaho Wheat Commission U.S. Livestock Genetics Export,
Inc.
Indian River Citrus League U.S. Meat Export Federation
Kansas Association of Wheat Growers U.S. Rice Producers Association
Kansas Livestock Association U.S. Wheat Associates, Inc.
Kansas Wheat Commission Utah Department of Agriculture
Kentucky Distillers' Association Valley Fig Growers
Land O'Lakes, Inc. Virginia Wineries Association
Leather Industries of America Washington Apple Commission
Maryland Grain Producers Washington State Fruit Commission
Association
Minnesota Association of Wheat Washington Wheat Commission
Growers
Minnesota Wheat Research and Welch Foods Inc., A Cooperative
Promotion Council
Mohair Council of America Western Growers Association
Montana Grain Growers Association Western Pistachio Association
Montana Wheat and Barley Committee Western U.S. Agricultural Trade
Association
National Association of State WineAmerica (The National
Departments of Association of American Wineries)
Agriculture Winegrape Growers of America
National Association of Wheat Wine Institute
Growers

The Chairman. Mr. Censky.

STATEMENT OF STEPHEN L. CENSKY, CHIEF EXECUTIVE OFFICER,
AMERICAN SOYBEAN ASSOCIATION, ST. LOUIS, MO

Mr. Censky. Good morning, Mr. Chairman and Members of the
Subcommittee. I am Stephen Censky. I am CEO of the American
Soybean Association. ASA is the national, not-for-profit
organization that represents U.S. soybean farmers on policy and
international issues. We commend you for holding this hearing
today to review the effectiveness of export promotion programs.
Soybeans and soybean products are our country's number one
ag export commodity. Last year we exported a record-setting $23
billion in soybeans, soybean oil, and soybean meal. This
impressive export growth would not have been possible without
the unique government-industry partnership that characterizes
the Foreign Market Development Cooperator Program and the
Market Access Program administered by the Foreign Agricultural
Service.
These programs have been tremendously successful and
extremely cost effective in helping to expand exports of U.S.
soybeans as well as other agriculture commodities including
corn, wheat, rice, cotton, livestock, meat products, dairy,
forest products, peanuts, seafood, and a host of horticultural
products. I have been asked by the Subcommittee to focus on the
role of the Foreign Market Development Cooperator Program in
expanding exports.
The FMD Program is a public-private program dedicated to
the long-term development of foreign agriculture markets. Under
FMD U.S. Government funding is leveraged by the contributions
made by U.S. farmers, ranchers, and agriculture industry to
carry out targeted market development activities. The FMD
Program provides cost-share assistance to establish an on-the-
ground presence in markets to identify new markets and to
address foreign import constraints.
Under the FMD Program private sector organizations such as
ASA, U.S. Wheat Associates, U.S. Grains Council, USA Rice
Federation, Cotton Council International, American Peanut
Council, and other cooperators work with U.S. producers,
exporters, and others to develop strategic marketing plans that
detail market characteristics, the constraints limiting U.S.
exports in those markets, and proposed activities to overcome
those constraints.
These marketing plans are submitted to FAS as a unified
export strategy for each commodity. FAS then reviews all
submitted unified export strategies and makes FMD funding
allocations based on criteria published in the FMD regulations
that include cost-share contributions by U.S. industry,
capabilities and experience of the cooperator in successfully
developing markets and increasing exports, importance of the
commodity to overall U.S. trade, and anticipated increases in
U.S. exports resulting from the FMD funding.
ASA became a cooperator back in 1956, when we opened the
Foreign Market Development Program in Tokyo, Japan. At that
time Japan was only importing small quantities of U.S.
soybeans. Over the years ASA worked with feedmillers and the
Japanese swine, dairy, and poultry industries to educate and
demonstrate the value of putting high-quality soybean meal made
from U.S. soybeans in feed rations and to link Japanese
importers with U.S. exporters, both on the soybean as well on
the food-grade soybean sides. Today Japan is a top market for
U.S. soybean, surpassed only by China and Mexico. U.S. soybean
exports to Japan are valued at $1.3 billion last year.
I would like to quickly make four key points about the FMD
Cooperator Program. First is that the FMD is cost effective.
According to the Global Insight Study that has been referenced
here, the multi-year impact of market development expenditures
is equal to $35 in export gains for each dollar spent.
Number two, the FMD Program increases the U.S. exports of
U.S. agriculture products. I have highlighted Japan and could
mention many more as similar success stories could be told by
market development cooperators representing U.S. corn, rice,
wheat, cotton, livestock, forestry, horticultural product, and
other commodities.
Number three, the FMD Program helps U.S. agriculture
overcome the effects of foreign trade practices. Mr. Wootton
has mentioned that the EU has announced that they are going to
be spending over a billion dollars on promoting agriculture
exports, and that it plans to increase this amount on an annual
basis. By comparison, the U.S. will spend approximately $34.5
million on FMD and MAP this year.
And number four, the FMD Program helps keep U.S.
agriculture commodities strong and in turn support over one
million jobs. These jobs are on the farm and the ranch, in the
forest, on the water, as well as in banking, transportation,
finance, processing, and other industries.
In conclusion, the Foreign Market Development Cooperator
Program and the Market Access Program are among the few tools
that American agriculture and farmers have to remain
competitive in the global marketplace. They support over one
million jobs, not only on the farms and ranches but also in the
processing and export-related industries. ASA hopes that
Congress will maintain funding for agriculture export promotion
programs and for the Foreign Agricultural Service of USDA.
I would be happy to answer any questions the Subcommittee
may have. Thank you.
[The prepared statement of Mr. Censky follows:]

Prepared Statement of Stephen L. Censky, Chief Executive Officer,
American Soybean Association, St. Louis, MO
Good morning, Mr. Chairman and Members of the Subcommittee. I am
Stephen Censky, and I serve as Chief Executive Officer of the American
Soybean Association (ASA). ASA is the national, not-for-profit
organization that represents U.S. soybean farmers on policy and
international issues. We appreciate the opportunity to appear before
you today, and commend you for holding this hearing to review export
promotion programs and their effectiveness in expanding exports of U.S.
agricultural products.
Soybeans and soybean products are our country's number one export
commodity. Last year, we exported a record-setting $23 billion in
soybeans, soybean oil and soybean meal. This amount represents \1/5\ of
all U.S. agricultural exports and over 50 percent of U.S. soybean
production.
This impressive export growth could not have been achieved without
the unique government-industry partnership that characterizes the
market development and export promotion programs administered by the
Foreign Agricultural Service (FAS) and carried out by organizations
representing U.S. farmers and ranchers. By any measure, the Foreign
Market Development ``Cooperator'' Program and the Market Access Program
have been tremendously successful and extremely cost-effective in
helping expand U.S. exports of soybeans and other agricultural
commodities such as corn, wheat, rice, cotton, livestock and meat
products, dairy, forest products, peanuts, seafood, and a host of
horticultural products. I have been asked by the Subcommittee to
concentrate my testimony on the Foreign Market Development Cooperator
Program and its role in expanding U.S. agricultural exports.
The Foreign Market Development (Cooperator) Program
The Foreign Market Development (FMD) Program is a public-private
partnership program dedicated to long term market development of
foreign markets for U.S. agricultural exports. Under the FMD program,
U.S. Government funding is leveraged with contributions by U.S.
farmers, ranchers, and agri-industry to carry out targeted market
development activities. Activities implemented under the FMD program
are most often focused on opening and maintaining foreign markets,
while working on long-term changes to key constraints affecting a
market to allow for increased U.S. exports. It allows U.S. market
development organizations that represent U.S. farmers and ranchers
(referred to as ``Cooperators'' due to the cooperative private-public
partnership they have with FAS) to establish an on-ground country or
regional presence, identify new markets and address long-term foreign
import constraints and export growth opportunities. The FMD Program
provides cost-share assistance to allow market development cooperators
to:

1. Conduct market research. This includes: investigating the volume
of in-country product to meet demand in a market; the
suitability/viability of in-country product; the compatibility
of U.S. product; variables to market success; importance of
exports from other competing countries; history of product
domestically/internationally; competitiveness of U.S. product;
infrastructure capabilities to import U.S. products; and access
to importers/processors/retailers.

2. Carry out market analysis. This includes: determining the size
of a current market; potential size of the market in the future
if structural changes were made to allow for an improved market
environment; the opportunity for U.S. exports and likely U.S.
share; impediments to trade; political situation, demographics,
and economic stability of the market; long-term viability of
in-country demand; and government accessibility and regulatory
environment for market access.

3. Implement long-term market development activities following up
on favorable market research and analysis. Implementation of
market development activities constitutes the bulk of funding
and activities under the FMD program. Market development
activities include: supporting the long-term presence of people
and office facilities in key markets to develop sound and
expanding trade relationships; providing technical assistance
to buyers and users of the product; capacity building and
education through seminars and one-on-one work that ensure
market growth for participating commodities and products;
facilitating trade teams to U.S. to see U.S. production
standards and supply infrastructure; facilitating U.S. farmer,
rancher, and industry visits to current and prospective markets
to develop import networks and product specifications to meet
local market needs.

Under the FMD program, private sector Cooperators such as ASA, U.S.
Wheat Associates, U.S. Grains Council, USA Rice Federation, Cotton
Council International, National Peanut Council and others commodity
Cooperators work with U.S. producers, exporters, and others in the
industry to develop strategic marketing plans detailing market
characteristics, constraints limiting U.S. exports, and proposed
activities to overcome those constraints. These detailed marketing
plans are submitted to FAS as a ``Unified Export Strategy'' for the
U.S. commodity in question. FAS reviews all submitted Unified Export
Strategies and makes FMD funding allocations based on criteria included
in FMD program regulations that include cost-share contributions by
U.S. industry, capabilities and experience of the Cooperator in
successfully developing markets and increasing U.S. exports, importance
of the commodity in overall U.S. agricultural trade, and anticipated
increases in U.S. exports resulting from the FMD funding.
Examples of How ASA Has Utilized FMD Program Cost-Share Funding to
Develop Foreign Markets for U.S. Soybeans and Products
ASA became the first USDA-funded Cooperator under the FMD program
in 1956, when we opened a foreign market development program in Tokyo,
Japan. At that time, Japan was importing only small quantities U.S.
soybeans, and the Japanese had expressed concerns about the quality of
U.S. soybeans. During our first year, ASA participated in a series of
trade fairs and partnered with a coalition of Japanese business
interests in conducting market development activities. Our in-country
staff worked closely with Japanese industry leaders at all stages, from
buyer to retailer, as well as with university and research technicians,
and the technical and popular news media.
Japan proved to be an ideal country to begin export promotion,
becoming our largest foreign market in the 1970s, 1980s, and 1990s.
Over the years ASA worked with: feedmillers and the Japanese swine,
dairy, and poultry industries to educate and demonstrate the value of
putting high-quality soybean meal made from U.S. soybeans in feed
rations; Japanese soybean processors and importers to develop close and
outstanding trade relations; Japanese processors to increase the
quality and demand for soybean oil made from U.S. soybeans, both in the
human utilization market as well as in the industrial and printing ink
markets; and Japanese tofu, natto, and miso industries to demonstrate
the quality of U.S. food grade soybeans and to link Japanese importers
with U.S. exporters. Our office in Tokyo continues to service this
critical market today, and Japan remains a top market for U.S. soybean
products, surpassed only by China and Mexico. U.S. exports of soybeans
to Japan today are valued at $1.3 billion.
ASA went on to open other foreign offices and to conduct market
development activities in other markets. From regional and country
offices located in strategic areas, ASA International Marketing staff
and consultants today continue to implement market development
activities with customers around the world that are increasing demand
for U.S. soybeans and soy products.
But while Japan represents our first success story, China is
perhaps our most impressive. ASA opened an office in Beijing in 1982.
At that time China did not have a vertically-integrated animal feed
industry, and livestock production lacked health and nutritional
standards. China has the largest swine herd on the planet, but much of
it was backyard-based and did not include soybean meal in diets.
Similarly, while China produces more fresh water aquaculture fish than
the rest of the world combined, 20 years ago none of the fish feed
included soybean meal. Through a long term and comprehensive program of
demonstrating the value of soy-based feeds, ASA helped build demand for
soybeans to the level China imports today. Since 1995, while feed use
in China grew 140 percent, soybean meal used in animal feed rose an
astronomical 839 percent. And we've seen the amount of soybean meal
used in aquaculture feeds grow from zero just 20 years ago to 7 million
metric tons this year. The value of U.S. soybean exports to China has
grown 26-fold, from $414 million in 1996 to over $11 billion in 2010.
Many other successes can be cited to demonstrate the value of the
FMD program in expanding U.S. agricultural exports around the world.
FMD-supported programs began in Turkey in the 1980s. At that time, U.S.
soy exports were valued at only $4 million annually and the United
States was only a minor supplier. With support from the FMD program,
ASA and the soybean industry began working with Turkey's poultry and
feedmilling industries to educate them on the value of using soybean
meal in rations. Later, as local investors and companies developed
plans to build soybean processing plants in Turkey, ASA provided
technical assistance and developed close trade relations, educating
these buyers on how to buy from the United States, how to hedge price
risk, and how to produce high-quality products from U.S. soybeans.
Poultry producers now enjoy the benefit of better quality feed, U.S.
equipment manufacturers have seen their sales to Turkey grow, and the
U.S. soybean industry continues to grow soybean exports. Today,
Turkey's imports of U.S. soybeans, meal and oil have reached $310
million, with the U.S. being the dominant supplier. Fueled by economic
growth and a rising standard of living, Turkey's consumption of poultry
and vegetable oil continues to grow today.
Mexico is another example. With technical assistance and education
and nutrition seminars sponsored by ASA International Marketing, Mexico
has gained an appreciation of the benefits of soy for human
consumption. Mexico's retailers now sell millions of liters of soy-
fruit beverages, among other products. And U.S. soy exports have grown
over the years from virtually zero in the late 1970's to the current
value of $2.1 billion.
The FMD program provides cost-share assistance to ASA to implement
activities that have set the stage for the growth of U.S. soybean
exports. With the assistance of the FMD program, we have launched a
large number of feeding and demonstration trials in key international
markets. Through capacity building activities such as training and on-
farm consultations to promote improved swine and poultry practices, as
well as education on the benefits of soy protein for human consumption,
the FMD program has been extremely successful in helping us develop
product specifications and the supply networks to build demand for our
products and meet local market needs. More recently, we have engaged in
market development activities to promote the use of soy for industrial
products such soy ink, solvents, lubricants, and engine oils, to name
just a few. All the market development work in which we have engaged
over the years has been made possible with the FMD funds.
These FMD funds have been leveraged with contributions by U.S.
soybean farmers themselves through the soybean checkoff, as well as
with contributions by U.S. exporters. Today, the FMD funds ASA receives
are leveraged with soybean farmer and industry funding on a 2-to-1
basis--meaning that for every $1 invested in market development by the
FMD program, U.S. soybean farmers and industry are investing $2 to more
than match FMD funding.
Four Important Points about the FMD ``Cooperator'' Program
1. FMD is cost-effective. Funds are awarded on a competitive basis
via a comprehensive industry strategy evaluated by FAS using a formula
that takes into consideration export potential, experience with
managing export programs as well as industry contributions. The process
helps ensure that U.S. taxpayer's money is being invested in the
agricultural sector and organization with the highest chance of
success. Every organization that participates in the FMD program must
contribute its industry's resources to the program. Thus, U.S.
Government expenditures actually leverage more resources for foreign
market development than American agriculture would be able to
accomplish with only private sector funds.
From 2002-2009, the last year for which figures are available, the
multi-year impact of the increase in market development expenditures by
both industry and government is equal to $35 in agricultural export
gains for each dollar spent. In addition, total economic gain to the
U.S. economy is estimated to be an annual average of $1.1 billion from
increased market development activity. Further, government spending for
domestic supports (loan deficiency payments and countercyclical
payments) fell about $0.30 for every $1 spent on FMD.
2. The FMD program increases export of U.S. agricultural products.
I've highlighted just a few examples of how U.S. soybean farmers have
successfully utilized cost-share assistance provided under the FMD
program to develop long-term markets and increase exports. Similar
success stories can be told by the U.S. corn, rice, wheat, cotton,
livestock, forestry, and horticultural product industries.
3. The FMD program helps U.S. agriculture overcome the effects of
foreign trade practices. U.S. agricultural exports often face
subsidized or otherwise unfair competition from foreign products. U.S.
agricultural organizations utilize FMD resources to combat the
multitude of challenges in the international marketplace. As just one
example of the competition we face, the European Union recently
announced that it will spend the equivalent of $1.0 billion this year
on promoting agricultural exports, and that it plans to increase this
amount on an annual basis. By comparison, the U.S. will spend
approximately $248 million on FMD and MAP this year.
4. The FMD program helps keep U.S. agricultural exports strong,
which in turn supports almost one million American jobs. These jobs
were on the farm, ranch, in the forest and on the water, as well as in
banking, transportation, processing and other related industries. Every
state and local economy in the U.S. has jobs that are dependent upon
healthy exports of U.S. agricultural products.
Conclusion
The Foreign Market Development ``Cooperator'' program and Market
Access Program (MAP) are among the few tools that help American
agriculture and American farmers remain competitive in the global
marketplace. They are considered to be non-trade distorting or ``Green
Box'' programs under World Trade Organization (WTO) rules.
These cost-share market development and export promotion programs
help keep U.S. agricultural exports strong, which in turn support over
one million American jobs. These jobs are on U.S. farm and ranches, but
also are in processing, transportation, financing, and other related
industries. Every state and local economy in the U.S. has jobs that are
dependent upon healthy exports of U.S. agricultural products.
Agricultural exports have for years been the strongest positive
contributor to our nation's balance of trade. Increasing exports is a
significant tool to improve the lives of America's farmers and ranchers
while creating jobs, improving our balance of trade, expanding the farm
economy and larger U.S. economy, and increasing receipts to the
Treasury. The FMD and MAP programs have been critically important to
this success. ASA hopes this hearing will strengthen the resolve of
Congress to maintain current support for agricultural export promotion
programs, as well as strong support for the Foreign Agricultural
Service of USDA. I would be happy to answer any questions the
Subcommittee may have.

The Chairman. Thank you. Mr. Lively.

STATEMENT OF R. THAD LIVELY, SENIOR VICE PRESIDENT, TRADE
ACCESS, U.S. MEAT EXPORT FEDERATION, DENVER, CO

Mr. Lively. Thank you, Mr. Chairman. Good morning. My name
is Thad Lively. I am the Senior Vice President for Trade Access
at the U.S. Meat Export Federation, and I am very pleased to be
here today to talk to the Committee about USDA's Emerging
Markets Program.
Before I offer my comments on the EMP Program, however, I
would like to first say a few words about the organization I
work for, the U.S. Meat Export Federation. USMEF is a nonprofit
trade association based in Denver, Colorado. Our mission to
increase the profitability of the U.S. beef, pork, and lamb
industries by expanding exports and maximizing the value of
U.S. red meat production.
USMEF has been a participant in USDA's export programs
since it was founded in 1976. In recent years we have been the
second largest recipient of funding under the Market Access
Program in addition to participating in the Foreign Market
Development and EMP Programs. The financial support we receive
from the USDA is matched by producers and meat exporting
companies, most of which are small or medium-sized enterprises
that actively participate in USMEF programs.
The combination of strong government and industry support
for USMEF and its programs has provided the foundation for what
has been a very effective public-private partnership in export
market development for the red meat industry. Last year the
value of U.S. beef, pork, and lamb exports reached $8.9
billion. This represented a 32 percent year-over-year increase
for beef and a ten percent increase for pork. Growing economies
in countries like China, Russia, Mexico, and the Philippines
are fueling demand for beef and pork exports, and this is
making an important contribution to the continued health and
profitability of the red meat industry.
Of course, the continued growth in exports assumes that the
United States will have unfettered access to export markets as
they develop. Unfortunately, as we all know, to an increasing
degree, this is not the case as countries find new and creative
ways to protect their domestic agriculture industries through
non-tariff trade barriers that limit imports.
To cite just one example, we estimate that the United
States is losing roughly $1.4 billion in beef exports annually
due to the non-science-based BSE-related import restrictions
that are in place in Japan, China, Mexico, and Hong Kong.
Finding effective ways of addressing these kinds of trade
barriers is the single biggest challenge facing U.S. beef and
pork industries as they pursue their goal of increasing
exports.
A critical component of the red meat industry's strategy
for eliminating these non-science-based market access barriers
has been the kinds of activities that are funded by USDA's
Emerging Markets Program. The EMP Program provides funding for
technical assistance activities that support U.S. exports and
assists the food and rural business systems of emerging
markets.
Emerging markets are defined as countries that are taking
steps towards becoming market-oriented economies and which have
the potential to become viable and significant export markets
for U.S. agriculture. Examples of emerging markets include
countries as diverse as China, Indonesia, Mexico, and Russia.
EMP funding is allocated by FAS on an annual basis but also
in response to time-sensitive technical barriers to trade and
marketing opportunities as they arise. The ability to respond
quickly to developments in foreign markets makes the EMP
Program especially well suited to the needs of the agricultural
export industry.
EMP funds have been used to support a wide variety of
technical assistance projects, but USMEF experience with the
program has been centered on projects that address market
access constraints. We have been able to benefit especially
from FAS's ability to quickly review and approve our requests
for support to engage importing countries on a number of
rapidly-emerging market access issues, most of which have
stemmed from non-science-based trade barriers.
Perhaps the most notable exception of USMEF's use of EMP
funds is associated with our response to the BSE crisis in the
beef industry when countries around the world closed their
markets to U.S. beef. Fundamental to convincing countries to
reopen their markets has been our ability to restore the
confidence of foreign governments in the safety of U.S. beef.
As part of this effort USMEF has been able to draw in EMP
funds to bring animal and public health officials from a number
of countries, including Mexico, Russia, the Philippines, and
Egypt to the United States. During these visits we have worked
closely with USDA to educate these decision makers in foreign
governments on the science of BSE and the BSE risk mitigation
measures that are in place in this country. The training the
foreign officials have received on these EMP-sponsored trips
has made a significant contribution to the decisions by many
countries to relax and in some cases eliminate their BSE-
related import restrictions.
USMEF has also drawn----
The Chairman. The gentleman's time has expired. You want to
bring your comments to a close.
Mr. Lively. Okay. Thank you very much, sir. I appreciate
the time and look forward to your questions.
[The prepared statement of Mr. Lively follows:]

Prepared Statement of R. Thad Lively, Senior Vice President, Trade
Access, U.S. Meat Export Federation, Denver, CO
Good morning. My name is Thad Lively. I am the Senior Vice
President for Trade Access at the U.S. Meat Export Federation, and I am
very pleased to be here today to talk about USDA's Emerging Markets
Program (EMP).
Before I offer my comments on the EMP program, I would like to say
a few words about the organization I work for, the U.S. Meat Export
Federation. USMEF is a nonprofit trade association based in Denver,
Colorado. Our mission is to increase the profitability of the U.S.
beef, pork, and lamb industries by expanding exports and maximizing the
value of U.S. red meat production. We do this by conducting export
market development and promotion programs for beef, pork, and lamb in
over 60 countries around the world. We also work with the U.S.
Government and our industry partners to eliminate trade barriers and
open up new export opportunities through expanded market access.
USMEF has been a participant in USDA's export programs since it was
founded in 1976. In recent years, we have been the second largest
recipient of funding under the Market Access Program, in addition to
participating in the Foreign Market Development and EMP programs. The
financial support we receive from the USDA is matched by beef, pork,
corn, and soybean producers, who invest in USMEF's export programs
through the checkoff. In addition, USMEF's membership includes over 125
meat exporting companies, most of which are small small-to-medium sized
enterprises, which collectively provide significant financial support
to USMEF and are active participants in many of our export programs.
The combination of strong government and industry support for USMEF and
its programs has provided the foundation for what has been a very
effective public-private partnership in export market development for
the red meat industry.
Last year, the value of U.S. beef, pork, and lamb exports reached
$8.9 billion. This represented a 32 percent year-over-year increase for
beef and a ten percent increase for pork. Exports now account for 12
percent of U.S. beef production and close to 25 percent of our annual
output of pork. Growing economies in countries like China, Russia,
Mexico, and the Philippines are fueling demand for red meat exports.
Since consumption of beef and pork in the United States is forecast to
experience very limited growth in the future, exports hold the key to
the continued health and profitability of the red meat industry.
Of course, this assumes that the United States will have unfettered
access to export markets as they develop, and this increasingly is not
the case, as countries find new, creative ways to protect their
domestic industries through non-tariff trade barriers that limit beef
and pork imports. To cite just one example, we estimate that the United
States is losing roughly $1.4 billion in beef exports annually due to
the non-science-based, BSE-related import requirements that are in
place in Japan, China, Mexico, and Hong Kong. Finding effective ways of
addressing these kinds of trade barriers is the single biggest
challenge facing the U.S. beef and pork industries as they pursue their
goal of increasing exports.
A critically important component of the red meat industry's
strategy for eliminating non-science-based market access barriers has
been the kinds of activities that are funded by USDA's EMP program. The
Emerging Markets Program provides funding to private and public
organizations for technical assistance activities that improve access
to emerging markets. Emerging markets are defined as countries that are
taking steps toward becoming market-oriented economies and which have
the potential to become viable and significant export markets for U.S.
agriculture. Examples of emerging markets include countries as diverse
as China, Malaysia, Mexico, and Russia. Consistent with the objectives
of the program, EMP funds can only be used for projects that assist the
food and rural business systems of the importing country in addition to
supporting U.S. exports.
The Emerging Markets Program is authorized by the farm Bill, and
funding for the program from the Commodity Credit Corporation currently
is set at $10 million a year. FAS administers the program according to
regulations that specify reporting, evaluation, and compliance
requirements and describe the rules for cost sharing. According to the
cost sharing provisions, private sector recipients of EMP funds are
required to commit their own resources to the proposed project in order
to qualify for funding under the program. Through its administration of
the EMP program FAS ensures that approved projects complement and
support the objectives of the other export programs.
EMP funding is allocated by FAS through three different channels.
The first of these, the Central Fund, is the primary means of
allocating EMP funds on an annual basis. In addition to the Central
Fund, FAS has the capacity to quickly review and approve projects which
specifically address time-sensitive technical barriers to trade and
marketing opportunities as they arise. These channels are referred to
as the Technical Issues Resolution Fund, or TIRF, and the Quick
Response Marketing Fund. The ability to respond quickly to developments
in foreign markets makes the EMP program especially well-suited to the
needs of the agricultural export industry.
EMP funds have been used to support a wide variety of technical
assistance projects, including feasibility studies, market research,
sectoral assessments, orientation visits, specialized training, and
business workshops. USMEF's experience with the program has been
centered on projects that addressed market access constraints. We have
been able to benefit especially from FAS's ability to respond quickly
to our requests for support under the TIRF fund. The availability of
TIRF funding has permitted us to effectively engage importing countries
on a number of rapidly emerging market access issues, most of which
have stemmed from non-science-based trade barriers.
Perhaps the most notable example of USMEF's use of EMP funds is
associated with our response to the BSE crisis in the beef industry.
After the United States reported its first case of BSE in late 2003,
most countries around the world closed their markets to U.S. beef
exports. It quickly became clear that as part of convincing countries
to re-open their markets we would need to restore the confidence of
foreign governments in the safety of U.S. beef. This has proven to be a
much larger and more complex task than we imagined, but over the past 7
years, we have succeeded in changing the thinking of officials in many
countries about BSE and have made major inroads in turning around
negative perceptions of U.S. beef.
As part of this effort, USMEF has been able to draw on EMP funds to
bring animal and public health officials from a number of countries,
including Mexico, Russia, the Philippines, and China, to the United
States. During these visits, we have worked closely with USDA to
educate these decision-makers in foreign governments on the science of
BSE and the BSE risk mitigation measures that are in place in this
country. The training that foreign officials have received on these
EMP-sponsored trips has made a significant contribution to the
decisions by many countries to relax or eliminate their BSE-related
import restrictions. Although as I have already noted, we still have
work to do, the recovery of U.S. beef exports is well advanced, and the
value of exports last year exceeded the pre-BSE level for the first
time since 2003.
In addition to using EMP funds to educate foreign officials on BSE,
USMEF also has drawn on EMP funding to support similar activities that
were designed to address market access barriers to pork exports. In
several of these cases, USMEF has been able to work jointly with the
USA Poultry and Egg Export Council to request EMP funds for projects
that benefited the pork and poultry industries equally. For example,
after Russia de-listed a number of pork and poultry slaughterhouses,
the EMP program supported a visit to the United States by Russian
veterinary officials in the fall of 2009. This trip was the first in a
series of activities to educate Russian officials on U.S. pork and
poultry production practices and explain the scientific basis for the
many differences between U.S. and Russian meat hygiene and inspection
requirements. Although Russia has not yet recognized the equivalence of
the U.S. meat inspection system, the ongoing technical exchange with
the Russian veterinary authorities has increased their confidence in
the U.S. system and fostered a more open, constructive working
relationship.
In closing, I would like to thank you again for this opportunity to
speak on behalf of USDA's export programs and the EMP program in
particular.

The Chairman. Sorry to have to do that.
Mr. Hamilton.

STATEMENT OF TIM HAMILTON, EXECUTIVE DIRECTOR, FOOD EXPORT
ASSOCIATION OF THE MIDWEST USA AND FOOD
EXPORT USA--NORTHEAST, CHICAGO, IL

Mr. Hamilton. Thank you, Mr. Chairman. My name is Tim
Hamilton. I represent two of the four State Regional Trade
Groups. These are associations of the State Departments of
Agriculture, ten in the Northeast and 12 in the Midwest. Like
our counterparts in the West and the South, we work with our
member agencies strictly to focus on helping small companies
export. We use funding from the Market Access Program in a
variety of ways to conduct outreach to these companies, to
provide training, technical support, and promotional funding to
help them boost their overseas sales. At a time when Congress
is looking for ways to reduce government funding, we believe we
can provide you with some compelling reasons to maintain
funding for these programs.
Our foreign competition would like nothing better than to
see the U.S. reduce its support for agricultural exports. If
that happens, we will simply be handing these sales and the
jobs that they support to our overseas competition. We can keep
these jobs in the United States, or we can stop promoting our
U.S. exports and watch these jobs go overseas.
At the state regional trade groups we and our member states
focus exclusively on small companies or SMEs. Many of these
firms are family owned. Most of them are food processors that
use agricultural commodities as inputs, which they turn into
finished goods for export. Their products vary from snack foods
to convenience foods, food ingredients, organic products,
literally soup to nuts. These are companies that have been
successful in the domestic market, often for generations, but
in most cases they have never even considered the export
market.
Food and agricultural producers are challenged to find
growth opportunities here at home, but at the same time
emerging markets overseas offer huge growth potential for these
companies if only they know about the opportunities and how to
take advantage of them.
Small firms are often reluctant at first, unsure of how
they might be successful doing business in another language,
another currency, another culture. We provide education and
training to help them identify where their best markets might
be and what hurdles they may need to overcome.
Once a small company is ready to begin exporting, their
first challenge is to find customers. We use MAP funds to
prepare these small companies and to arrange meetings for them
with qualified international buyers. This might be done in the
U.S. as part of buying missions, it might be done overseas as
part of a trade mission, at trade shows, or other ways. I have
included several examples of this in my written testimony.
Once companies have become established in the market, it
isn't enough just to have a customer. It is essential that they
promote those products in these competitive markets.
Fortunately we are able to offer some limited promotional
support to these small companies through the MAP Program.
In addition, the Quality Samples Program is a small
program, only $2.5 million, which is intended to help U.S.
agricultural trade organizations provide samples of their
agricultural products to potential customers overseas. Since
the QSP focuses more on commodity products which need to be
further altered, the state regional trade groups focus more on
finished goods. So we have had less opportunity to use the QSP
Program.
However, the QSP was used very successfully from 2001 to
2005 by the western regional trade group. The small projects
that they initiated under the QSP paved the way for several
U.S. agricultural products by creating trade interests for
seafood in Korea, tomatoes in Japan, and many varieties of
fruits and nuts to Taiwan and China. And these products and
producers have now graduated into larger scale MAP projects.
Many of the jobs supported by agricultural exports are
intrinsically U.S. jobs. They cannot be out-sourced overseas.
They are tied to farm production here in the United States. The
products are grown here, and they are processed here. If we
maintain these overseas markets, then these jobs will continue
to be held by Americans. If we lose these overseas markets, we
risk losing these jobs to our competitors in China, Europe, and
elsewhere.
In our work with international customers we are constantly
reminded of the extensive support that our competitor nation
offer to our customers. Buyers enjoy lavish treatment made
possible by support from European or other governments. You can
attend just about any international trade show, and you will
see spectacular national exhibits by China, by Europe, and by
Chile or many of our competitors. Even small countries like
Taiwan and the Netherlands have grand displays, often in stark
contrast to the U.S. exhibit, which is modest and spare.
For the U.S. economy to grow not just out of this recession
but to continue to be competitive we need to produce products
that the world wants to buy. U.S. food and agricultural
products are recognized around the world for being safe, high
quality, and innovative. This is a real opportunity for our
country and for our economy. Every day we see small U.S.
companies entering the global marketplace that they were
previously unaware of or even fearful of, and we see these
companies being successful, and we hear from them day after
day, time after time that most of them never would have
considered it had it not been for the support and incentive
from the Market Access Program.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Hamilton follows:]

Prepared Statement of Tim Hamilton, Executive Director, Food Export
Association of the Midwest USA and Food Export USA--Northeast,
Chicago, IL
Good morning, Mr. Chairman. My name is Tim Hamilton, and I am
Executive Director of Food Export Association of the Midwest USA, known
as Food Export--Midwest, and Food Export USA--Northeast, known as Food
Export--Northeast. These are State Regional Trade Groups that offer
services to help U.S. food and agricultural companies promote their
products in foreign markets. We commend you, Mr. Chairman, and Members
of the Committee, for holding this hearing to review our agricultural
trade programs and wish to express our appreciation for this
opportunity to share our views.
The organizations I represent are associations of the 22 Midwestern
and Northeastern state departments of agriculture. Like our
counterparts in the Western and Southern regions, we work with our
member agencies to increase the number of food and agricultural
companies that export, as well as to help current exporters increase
the volume and value of their export sales. We use funding from the
Market Access Program (MAP) in a variety of ways to conduct outreach to
these companies, to provide training, technical support and promotional
funding to boost overseas sales by small U.S. producers and processors.
We are also members of the Coalition to Promote U.S. Agricultural
Exports--a broad-based coalition of over 150 organizations representing
farmers and ranchers, fishermen and forest product producers,
cooperatives, and small businesses.
At a time when Congress is looking for ways to reduce government
funding, we believe we can provide you compelling reasons to continue
to fund programs, including the Market Access Program, that help
maintain the ability of American agriculture to compete effectively in
a highly competitive global marketplace in which many of our foreign
competitors enjoy extensive financial support from their own
governments.
Our foreign competition would like nothing better than to see the
U.S. reduce its support for agricultural exporters. That will enable
them to more easily take over our market share. If we reduce support
for the Market Access Program, we will watch our overseas market share
erode. If that happens, we will be handing these sales, and the jobs
they support, to our foreign competition. We can keep these jobs in the
U.S., or we can stop promoting our U.S. exports and watch these jobs go
overseas. Maintaining support for U.S. exports will help maintain and
grow these jobs in the U.S. If we stop our investment, even for a short
time, we will lose market share that will likely never be available to
U.S. firms again.
Food Export--Midwest and Northeast and our members focus almost
exclusively on assisting small companies, also known as SMEs. Many of
these firms are family owned. Most of them are food processors that use
agricultural commodities as inputs, which they turn into finished goods
for export. Their products vary from snack foods to convenience foods,
pet food, beverages, gourmet products, food ingredients, natural and
organic products, literally soup to nuts. What they all have in common
is that they are made from U.S. agricultural products.
These are companies that have been successful in the domestic
market, often for generations, but in most cases they have never
considered the export market. In many respects, our U.S. food market is
a mature market. Food and agricultural producers are challenged to find
growth opportunities here at home. At the same time, emerging markets
overseas offer tremendous growth potential for these U.S. producers, if
only our companies know about these opportunities and how to take
advantage of them.
With our state department of agriculture partners, we work hard to
identify such firms that are not currently exporting, and encourage
them to consider going international. Even among the firms who are
already seeking an international outlet for the products, they are
uncertain how to proceed. Small firms are often reluctant at first,
unsure of how they might be successful doing business in another
language, another currency, another culture. We provide education and
training to help them identify where their best markets might be, and
what hurdles they might need to overcome. We look at what channels
might be appropriate, and consider issues like labeling or packaging
concerns, tariffs, prohibited ingredients or related challenges.
Once a small company is ready to begin exporting, their first
challenge is to find customers--usually importers, distributors or
supermarket buyers. We use MAP funds to prepare U.S. companies, and to
arrange meetings for them with qualified international buyers. This
might be done in the U.S. as part of a Buyers Mission, often at a major
trade show, where we make arrangements for a number of U.S. suppliers
to meet with foreign buyers. It might be done overseas as part of a
Trade Mission, where U.S. companies meet importers of products like
theirs. We support more than two dozen such events each year.
I'd like to offer a few examples of how MAP has benefited specific
small firms. Dutch Farms is a small, fourth-generation family-owned
firm located in Illinois. They participated in a mission in which we
used MAP funds to sponsor key buyers to travel to the U.S. At the
mission, Dutch Farms had the chance to meet a buyer from China, who
ordered a test-shipment of 2,500 lbs. of Dutch Farms' cheese. The firm
expects this to grow to a monthly shipment of 40,000 pounds, valued at
$100,000 per month. MAP funding made that possible.
Churchies is a small specialty food company based in Malvern,
Pennsylvania. Their participation in one of our trade missions to
Canada introduced them to a broker that became their first
international customer ever.
Many international sales contacts are made at trade shows. Food
Export--Midwest and Northeast support companies with advance
preparation and technical support to make sure that these shows are
successful for them. For example, we ensure that they are well prepared
with appropriate pricing, and that their materials are translated if
necessary. We make sure they have the necessary information about the
market for their products, and what potential restrictions or
competition they might face. We also work to make sure U.S. firms meet
the right foreign customers at the show. By preparing them ahead of
time, and offering some technical support at the show, we significantly
improve their chances for success.
Food Export--Northeast provided technical support and introductions
to buyers at a trade show in Singapore for Sweet Street Desserts, a
Pennsylvania based family-owned bakery products company. MAP funding
provided the support they needed, resulting in the small company
meeting more than 100 new buyers. Soon after, they shipped their first
container of frozen bakery products to Singapore, and have begun
discussions with potential customers in other Asian countries. Again,
MAP funding made that possible.
Another family owned company, this one from Missouri, Diamond Pet
Foods used our support which was made possible with MAP funding, to
participate at the Interzoo trade show. With that support, they
identified customers from India, Australia, the UAE and Qatar, selling
a half million dollars in pet food in the first year. These sales help
Diamond Pet to remain a stable and growing employer in the small town
of Meta, Missouri, as well as a good customer for the agricultural
producers in the area.
Once companies have become established in a market, it isn't enough
just to have a customer. Like in the U.S., it is essential that they
promote those products in these competitive markets. Fortunately, we
are able to offer some limited promotional support to help these SMEs
get their products established. This support includes advertising,
demonstrations, trade show costs, label modifications, etc. These
promotional services are made possible through MAP funding, and are
provided on a cost-share basis, with companies investing at least 50%
of the overall costs. This support is available to the companies for
only a limited period of time in any given market: Once their product
is established, then it is up to the company to fund its own expenses.
This type of promotional support allowed Preston Farms, an Indiana
popcorn supplier, to attend a major trade show in Shanghai, China that
they would not have considered otherwise. Their exhibit led to the
company's first ever sale of popcorn in China.
According to the company, new export sales have a direct impact on
their local economy as the firm contracts additional popcorn acreage
from more area farmers.
The Cabot Creamery in Cabot, Vermont was able to use MAP-supported
funding to translate the labels on their specialty cheeses from English
to Spanish. This allowed the firm to begin exporting to Mexico for the
first time. Because Cabot is a farmer-owned cooperative, these new
export sales support their producer members located in Vermont and New
York. MAP funding made this possible.
During the past year, with support from MAP, Food Export--Midwest
and Northeast have assisted 1,186 different firms. These companies
reported that they were introduced to more than 18,000 potential new
customers because of that support. Further, these firms went on to make
their first sale in a new country 642 times. At least 51 of these
companies made their first export sale ever this past year. They
reported more than $1.2 billion in new export sales, and project nearly
double that in additional sales over the next year. During 2010. these
companies reported that they have specifically added 964 new jobs
because of this program. Based on our data. we estimate that total new
export sales by these firms support nearly 9,736 new or existing jobs.
While the MAP program clearly supports agricultural producers in
rural areas, many companies that process these products for export are
located in urban areas.
For example: Bassetts Ice Cream calls itself the oldest ice cream
company in America. The family-owned firm has been making ice cream in
and around Philadelphia for 150 years, using milk and other ingredients
from the local area. With promotional support made possible by the MAP
program, the firm began selling their ice cream in China in 2008. Over
the past three years, their sales have grown from $50,000 the first
year to $800,000 in 2010. The firm expects this to nearly double, to
$1.5 million, in 2011. According to the firm's international sales
team, without this support the firm likely would not have any sales in
China right now.
Many of the jobs that are supported by agricultural exports are
intrinsically U.S. jobs. They cannot be out-sourced overseas. They are
tied to farm production in the U.S. The products are grown here, and
they are processed here. If we are able to maintain our overseas
markets, then these jobs will be held by Americans. If we lose these
overseas markets, then we risk losing these jobs to our competitors in
China, Europe and elsewhere.
In our work with international customers, we are constantly
reminded of the extensive support that our competitor nations are able
to offer our customers. Buyers enjoy lavish treatment made possible by
support from European or other governments. You can attend just about
any major international trade show, where you will see spectacular
national exhibits by China, Europe, Chile and many of our other
competitors. Even small countries like Taiwan and the Netherlands mount
grand displays, in stark contrast to the U.S. exhibit that is usually
modest and spare.
The Market Access Program acts to encourage investment by the
private sector. It gives incentives for companies to invest in new
markets that they might not otherwise consider. The companies that
participated in our programs invested an average of $2.67 for each
dollar in public support. But the international market has additional
risks, and the length of time it takes to become successful is longer
than for domestic sales. These risks make exporting particularly
challenging for small companies. That is why 94% of small U.S.
companies do not currently export, and it is why they need
encouragement, incentive and support to undertake the process.
Small businesses support half of the jobs in the U.S. So
encouraging these small companies to begin or expand exporting has a
double benefit. It supports not only the farmers that produce the
commodities. It also helps support the jobs in these companies that
process these products into finished goods for export--both in rural
and urban areas. USDA estimates that each billion dollars of exports
supports 8,400 jobs.
It is really in our country's long term best interest to continue
efforts to build our exports. For the U.S. economy to grow, not just
out of this recession, but to continue to be competitive, we need to
produce products that the world wants to buy. U.S. food and
agricultural products are recognized around the world for being safe,
high quality and innovative. This is a real opportunity for our
country.
Every day, we see small U.S. companies entering that global
marketplace that they were previously unaware of, or fearful of. And we
see these companies being successful--and being innovative. Customizing
their products and finding new customers in markets where they never
thought they could. And we hear from them day after day, that most of
them would not have done it without the support and incentive made
possible from the MAP program.
Our nation's exports of food and agricultural products can continue
to be a major success story in these otherwise difficult economic
times. This is not the time to cut back on these efforts. It is a
chance to take advantage of these global opportunities, and provide the
support and incentive that companies, including small companies, need
to pursue these markets, build sales, and put Americans to work.
Mr. Chairman and Members of the Committee, I encourage you to
support efforts that continue to boost America's food and agricultural
exports, including MAP, that support our farmers, our small businesses,
and the Americans that produce these outstanding products.
Thank you.

The Chairman. Thank you, and the panel's comments will
conclude with Mr. Nikolich.

STATEMENT OF GEORGE NIKOLICH, VICE PRESIDENT,
TECHNICAL OPERATIONS, GERAWAN FARMING, INC.; BOARD MEMBER,
CALIFORNIA GRAPE & TREE FRUIT LEAGUE, REEDLEY, CA

Mr. Nikolich. Thank you, Mr. Chairman. I appreciate the
opportunity to speak to you today about market development
programs. Today my focus will be on the Technical Assistance
Specialty Crops program, TASC program, which our stone fruit
industry has used to great effect to overcome many of the
increasing challenges of technical trade barriers, and in the
interest of time I will summarize my comments by providing a
couple of examples, a couple of key examples for our stone
fruit industry that has utilized the TASC funding for their
success.
Minimum residue limits are limits on chemical residues that
our trading partners apply to products that we export. Foreign
export regulations, they change quickly, and often their
information is inconsistent from one source to another. We have
used TASC funding to develop a quick and easy-to-access
database to enhance uninterrupted trade and beyond stone fruit,
TASC funding has also been used to support the development and
maintenance of USDA/U.S. EPA MRL database for maximum chemical
residue standards involving hundreds of specialty crops.
Also in regards to maximum residue limits, one of the
issues we are often faced with is that our industry does a
wonderful job developing new chemistry, new crop protection
materials that can be used which are safer, more effective, but
if an MRL does not exist for those products, then we are unable
to export. TASC funds have also supported industry
representatives participating in discussions with U.S. and
foreign regulatory agencies, markets such as Taiwan, Japan, and
Canada, and it is critical in order to satisfy our needs for
phytosanitary quarantine treatments to use the most effective
materials possible. It is critical to have a continuing
effective dialogue with those export markets so that we can be
fast on our feet and make use of those superior products as
soon as they are available to us.
Also, a real success for our industry and for our company
specifically has been the Mexico export program. California
growers have been exporting stone fruit to Mexico under a U.S.,
Mexico bilateral work plan since 1994. Over 26 million boxes of
California stone fruit have been shipped to Mexico since that
time.
The program involves both a fumigation or non-fumigation
systems approach protocol. The systems approach protocol is one
in which the Mexican Government has boots on the ground, they
have supervisors overseeing their process. Costs have been
close to $\1/2\ million over recent years, and TASC funds have
served to defray some of the costs to industry for that.
In addition, support through TASC funding has allowed our
producers to work towards developing alternatives to chemical
means for phytosanitary quarantine treatments. This is
particularly important to our industry in that, for instance,
methyl bromide is a very effective quarantine treatment,
however, if you start with a good-eating piece of fruit, you
treat it with methyl bromide, you wind up with a piece of fruit
that is okay, and the difference between the market for a great
tasting piece of fruit and an okay piece of fruit is virtually
the same as having a strong market or no market at all.
Without the assistance of TASC funds our trade
organizations and industry could not have undertaken these
types of activities, nor could we have shipped over 25 percent
of our volume to our 16 export partners.
Thank you, again, for the opportunity to discuss these
matters.
[The prepared statement of Mr. Nikolich follows:]

Prepared Statement of George Nikolich, Vice President, Technical
Operations, Gerawan Farming, Inc.; Board Member, California Grape &
Tree Fruit League, Reedley, CA
Chairman Johnson and Members of the Committee, thank you for the
opportunity to provide testimony in this hearing to review market
promotion programs and their effectiveness on expanding exports of U.S.
agricultural products.
Technical trade barriers represent an important, increasing, and in
many cases, complex challenge faced by U.S. exporters of agricultural
products. USDA's Technical Assistance for Specialty Crops (TASC)
program is relied upon by U.S. organizations and businesses to provide
funding for projects that address sanitary, phytosanitary, and
technical barriers that prohibit or threaten the export of U.S.
specialty crops.
The following are examples of the positive impact TASC funding has
had in supporting growers', shippers' and commodity representatives'
efforts to address continuing and new non-tariff barriers to trade:

Foreign regulations change with speed and frequency.
Additionally, information from one source sometimes contradicts
information from other sources. TASC funding has assisted
companies such as Gerawan Farming, Inc. and other stone fruit
producers with the ability to obtain the market intelligence
necessary for meeting import requirements. The stone fruit
industry developed an export database with the support of TASC
funds that identifies export requirements for growers, such as
labeling documentation, phytosanitary requirements, tariffs and
taxes, and sanitary requirements, such as chemical residue
levels, for all major stone fruit export markets. Quick access
to accurate export requirements through this database helps to
facilitate uninterrupted trade. Beyond stone fruit, TASC
funding has also been used to support the development and
maintenance of the USDA/U.S. EPA MRL database that tracks and
compares U.S. and international chemical residue standards on
hundreds of specialty crops.

A primary concern for U.S. growers and shippers when
implementing integrated pest management programs is ensuring
that any residues resulting from applications of crop
protection materials meet both U.S. and international
standards. This can be challenging as standards often differ by
country and more international governments are insisting upon
their own unique set of standards. As this trend continues to
grow, fresh market commodities such as stone fruit face
challenges in managing insect and disease control to meet
export phytosanitary requirements while also observing the
differing regulatory requirements for residues within foreign
market destinations. U.S. growers consider maximum residue
level (MRL) harmonization as one of the most important and
growing issues within international agricultural trade. TASC
funds have been utilized to allow industry representatives to
participate in discussions between U.S. and foreign regulatory
agencies from key export markets such as Taiwan, Japan and
Canada. These discussions help the industry to develop a better
understanding of food standards within foreign markets with the
goal of ensuring that science-based MRLs continue to be
established so that growers may freely export produce.

California growers have been exporting stone fruit to Mexico
under the U.S.-Mexico bilateral work plan agreements since
1994. During this period, over 26 million boxes of California
stone fruit have been exported to Mexico under either a
fumigation or ``systems approach'' (non-fumigation) protocol.
Since the inception of this program, the Mexican government has
required that their plant quarantine officials ``supervise''
the activities of the program's participants, USDA's Animal
Plant Health Inspection Service (APHIS), and California
Department of Food and Agriculture (CDFA) or county regulatory
officials in California. The annual cost to industry for the
required Mexican monitoring program has grown to over $470,000
in recent years. These costs are charged back to the packing
companies, such as Gerawan Farming, participating in each
year's program. TASC funds have helped to defray some of the
costs of Mexican oversight while the industry continues to work
with USDA/APHIS, USDA's Foreign Agricultural Service (FAS), and
other government offices as necessary to negotiate an end to
Mexico's excessive oversight and regulatory requirements. This
funding will help ensure the long-term viability of the export
program for all California shippers which is extremely
important not only because the Mexican market is of great value
in and of itself, but also because it represents significant
demand that helps stabilize all other markets, including
domestic. Without Federal funding, it is likely that the costs
of Mexican oversight in California would prohibit many
California shippers, particularly the smaller companies, from
participating in this program.

Support through TASC funding has allowed our producers to
work towards developing alternative chemical and non-chemical
treatments to replace methyl bromide fumigation as a quarantine
measure. This research has helped meet quarantine needs within
export markets and reduce the post-harvest losses caused by
pathogens, insects and some post-harvest treatments themselves.
Funds have provided stone fruit growers with the ability to
satisfy the quarantine concerns within a number of markets,
such as Australia, Mexico, Canada and Colombia.

Without the assistance of Federal funding provided under the
TASC program, participating organizations such as Gerawan
Farming, Inc. would be unable to undertake these types of
activities and could not develop the necessary data to assist
USDA in negotiating reduced mitigation protocols to maintain or
expand U.S. agricultural product exports. Without TASC, our
industry could not have shipped the over ten million packages
representing 20% of our volume to our export partners last
year.

Because of its variety and clear superiority, the U.S. specialty
crop sector is one of the most vibrant components of U.S. agricultural
trade. The TASC program and other programs discussed today are vital to
maintaining the sector's access to export markets and its global
competitiveness.
Again, thank you for the opportunity to provide the Committee with
testimony on the benefits of market promotion programs and their
effectiveness on expanding exports of U.S. agricultural products.

The Chairman. Thank you to all the panelists, and in the
interest of efficiency I would like to defer now to the Ranking
Member, Mr. Costa.
Mr. Costa. Thank you very much, Mr. Chairman. Let me
quickly go through a couple of the different witnesses.
Mr. Wootton, I want to ask the same question to you that I
asked earlier to Mr. Brewer, and that is I believe that the
Market Access Program for agriculture across the country has
had tremendous benefits, and you cited that in your testimony.
You also were very clear to let people understand that while
Sunkist is a well-known, popular brand name, it is an
organization that for over 100 years represents over 4,000
growers in which the average size of an orchard of citrus is 40
acres. And with all due deference to my friends in Florida,
California now and has been for a little bit, the number one
citrus state in the nation.
The Market Access Program: Is this corporate welfare?
Mr. Wootton. No, Congressman, it is not, and we object to
that mischaracterization which some organizations I know said
that before the Government Reform and Oversight Committee
hearing within the last 2 weeks and cited that a number of
major corporations, for profit corporations were the
beneficiaries of MAP funds. It was completely untrue.
Congress in 1995 reestablished new eligibility requirements
for participation in MAP, and as Mr. Brewer outlined, these are
not-for-profit U.S. agricultural trade associations, not-for-
profit cooperatives, State Regional Trade Groups, and the
beneficiaries are small business enterprises and small farmers.
So this is certainly not corporate welfare.
Mr. Costa. Thank you very much. Mr. Nikolich, thank you for
coming all the way from California. You did a good job in
explaining how your efforts and with Gerawan Farms have done in
using the Technical Assistance for Specialty Crop Program.
For newer Members here on the Committee, we deal with this
regularly, but could you explain the challenges that we face
with sanitary and phytosanitary standards, technical barriers
that can be non-tariff trade barriers that we deal with on
specialty crops compared with other agricultural products, even
with countries that we have an agreement with like NAFTA?
Mr. Nikolich. You are referring to for lack of a better
term, non-scientific-based barriers?
Mr. Costa. Yes. Non-tariff barriers.
Mr. Nikolich. Every year we are always waiting for the
other shoe to drop, invasive pest species or a major concern to
us in California. We have a number of countries who have
imposed barriers to trade based on phytosanitary conditions
that may or may not have much to do with science. There are
pest species that we have at great cost to our industry,
developed phytosanitary quarantine treatments, and those
regulations are often considered to be unnecessarily complex
and rigorous. And it has been a real challenge, not only in
developing the science necessary to do quarantine treatments
but to also overcome the fact that it is a moving target, and
it is very difficult to attempt to keep up with the changes.
Mr. Costa. Before my time expires here, could you give an
example on the TASC, what kind of market intelligence you have
been able to gain in terms of marketing your products abroad
and how it has impacted? And also, as we look at the
reauthorization of the farm bill, what changes you might
recommend we make in TASC.
Mr. Nikolich. The primary benefit that we have had through
the TASC funding has been to work directly with our export
partners to understand their needs. For instance, food safety
may be a number one concern in the U.S. but really chemical
residues are number one interest to most of our export
partners. So developing a personal relationship with our export
partners facilitated through the meetings and the dialogue and
the systems that have been supported through TASC funding has
been of great importance to stay in touch and to understand the
changes and the needs of our customers.
In terms of recommended changes to TASC funding or
additions, for instance, as was noted earlier, table grapes has
a pre-clearance program. There is a great need for a similar
program in stone fruit, and we would also like to rely more on
USDA, our own California Department of Food and Agriculture and
agricultural commissioners' offices for oversight rather than
have to go to the expense of funding our export partners'
representatives here on our soil.
Mr. Costa. You know, sometimes I hate when we use acronyms
in government, and by the same token as farmers sometimes with
the wonderful variety of crops we grow around the country, we
tend to take terms for granted, but it is important for those
people who don't grow stone fruit in other parts of the country
that we explain what category of fruits that we include in
stone fruit.
Mr. Nikolich. You are right. Stone fruit, everything from
apricots, peaches, plums, nectarines, pluots, plumcots. There
is a variety and also cherries are considered stone fruit,
anything with a pit that you need to throw out is a stone
fruit.
Mr. Costa. It is a stone fruit. I was reminded of that by
my colleague from Illinois, and we use that term
interchangeably, and I knew most of the listing, but I knew I
would leave out pluots.
Mr. Nikolich. Pluots, plumcots. They are inter-specific
hybrids of apricots, plums.
Mr. Costa. Thank you.
The Chairman. The gentleman from Pennsylvania, Mr.
Thompson.
Mr. Thompson. All right. Well, I appreciate Mr. Costa
seeking that for those of us who have been sitting here
wondering what a stone fruit was. I love learning something
new.
Mr. Costa. And afraid to ask.
Mr. Thompson. Afraid to ask. That is right. I figured it
had to be round.
You know, this past 2009, the American dairy prices dropped
to unprecedented lows. I think nationwide our dairy farmers
were losing at that point certainly in my district, and around
the country, an average of $100 per cow per month. It is
generally accepted that a decrease in exporting was a major
factor of these low prices.
Now, a number of steps were subsequently taken by USDA,
including the activation of the Dairy Export Incentive Program,
which appears to be somewhat helpful.
Mr. Hamilton, I know in your testimony you referenced the
organization you work with and the types of those you are
representing today, I saw reference to Vermont creamery and ice
cream that was being exported to China. I wanted to seek your
thoughts of have the measures that USDA has been doing, are
they helpful, and what else can we do to increase our dairy
exports?
Mr. Hamilton. Thank you for that question. My expertise is
less on dairy policy than it is on the process of helping small
companies export their finished goods, which is why you saw in
my written testimony the examples of the ice cream and the
cheese products.
So from the perspective that we look at, we are helping
companies that generally have branded products that they are
trying to educate their foreign consumers about the value of
that brand as a U.S. product. So, the area that we are
supporting them is at the higher end in terms of the value-
added product rather than just the commodities.
In terms of the dairy policy that affects commodities, I
would have to defer to my colleagues from the Dairy Export
Council, who unfortunately aren't here this morning.
Mr. Thompson. Sure. Some of those, the ones that are
exporting those final finished products, is there anything that
stands out in your mind of just best practices, the ones that
have been very successful? What are they doing that others are
not to be successful at penetrating those foreign markets?
Mr. Hamilton. The really critical component for everyone is
really to find out what your customer is interested in, and so
that really varies by market and by product. We were talking
yesterday with a small company that wants to export yogurt, and
the challenge is what flavors do they want in a particular
country. Yogurt presents its own challenges because of the
bacteria that it normally and rightfully has, and there is also
a lot of protectionism against dairy. If you have a small
company that wants to export their dairy products to Canada,
which is a natural first market for them, it is a big
challenge. So they really need to look at the taste and the
preferences of the consumer.
Mexicans, for example, prefer soft cheese and light cheese
over hard cheese. So if you go to Mexico and try to sell a hard
yellow cheese, you are going to have a lot harder time than if
you have gone down, done your market research, and figured out
exactly what it is that the customers are looking for. And once
you have done that and can then customize your product, your
label, your packaging, then you stand to be a lot more
successful.
Mr. Thompson. Great. Thank you. Mr. Wootton, the
President's National Export Initiative identified small and
medium-sized businesses, referred to as SMEs, as a key focus
group on which to double our exports, U.S. exports.
Of your members those of similar cooperatives and other
entities from which you are familiar throughout the agriculture
industry, how many would you say would already qualify as an
SME?
Mr. Wootton. Congressman, I would say virtually all of our
membership would be SMEs. I mean, by definition of Small
Business Administration it is under a certain number of
employees that work for that company, and in the case of our
cooperative itself, Sunkist itself, we ourselves would qualify
as a small medium enterprise.
So we have slightly over 300 employees worldwide for
Sunkist. We have a very well-known name, but we are a small
organization, and our ownership of 4,000 citrus growers are
themselves very small family farmers.
Mr. Thompson. Do you feel that there is a need to refocus
the MAP or the FMD Programs towards SMEs?
Mr. Wootton. No. I think the SME objective of the Foreign
Agricultural Service is already being accomplished, and perhaps
they were unaware of who the constituencies were that were
benefiting from these programs. I mean, in the case of these
programs they are essentially the small farmers, small to
medium enterprises, small businesses that are participants
either through their cooperatives or through the regional,
state and regional trading organizations.
Mr. Thompson. Thank you. Thank you, gentlemen, for your
testimony.
Thank you, Mr. Chairman.
The Chairman. The gentleman from Vermont, Mr. Welch.
Mr. Welch. Thank you very much, Mr. Chairman.
You know, it is tremendous what the promotion program does
because we have to sell more ag products, and for those of us
who are supporters of that effort, I think we have the biggest
responsibility to try to improve it and identify areas where it
needs improvement and correction.
So what I would like to do is have each of you just very
quickly tell us the two things that you would do to improve the
effort that we need to make, and I will start with you, Mr.
Wootton.
Mr. Wootton. The effort that we ourselves need to make or
the effort that USDA would need to make in order to----
Mr. Welch. Well, give me a one and one. I mean, the goal
here has to be to promote and sell, successfully, more of our
ag products.
Mr. Wootton. Right.
Mr. Welch. Now, if you have a special way to do it with
dairy, I am always interested, but, seriously, the issue for us
is who promotes it, we have a bigger responsibility than anyone
else to improve it so that it doesn't become subject to this
attack, a global attack that is, ``corporate welfare.'' This is
about growing our economy and making agriculture thrive across
the country.
So I am interested in your two points.
Mr. Wootton. From the industry perspective, I mean, it is
the industry's obligation to best know their own markets and
where they have the opportunities to export and sell those
products. That is not a role for the government.
Mr. Welch. Right.
Mr. Wootton. And so, it is up to us to identify those
markets and try to compete effectively there. For an
organization like Sunkist our greatest asset is our brand, and
that is a huge tool for us to be able to establish a
relationship with customers and consumers in those markets.
Mr. Welch. Right. Okay. Let me go to Mr. Censky. I am not
going to have a lot of time. Thank you.
Mr. Censky. I would say one of the key things that I think
is important on both the Foreign Market Development Program and
the Market Access Program is that there are the requirements
for evaluation. We as participants are constantly evaluating
activities, our activities, finding out if they were
successful, how we can change them to improve them in the
future, are we moving the needle in the markets, and that is
one of the key requirements.
Mr. Welch. And do you think we are self-critical enough in
that review?
Mr. Censky. I think we are, and we do bring in outside
evaluators as well, so it is not just our staff that are
looking at our own programs.
Mr. Welch. Right.
Mr. Censky. We are bringing in outside evaluators.
Mr. Welch. Thank you. Mr. Lively.
Mr. Lively. Yes. Thank you, sir. I would agree with Mr.
Wootton in large regard. I think from the standpoint of the red
meat industry, which I represent, the clear trend is towards
more branded products.
Mr. Welch. Yes.
Mr. Lively. You know, historically it was basically a
commodity business, but that is changing. You see it here at
home, and you especially see it in overseas markets. The truth
is the branded guidelines that exist today under MAP make it
difficult for us to support introducing some of those brands
into the market, and to be clear, I am not talking about the
government using taxpayers' money to support brands of
humungous companies.
Mr. Welch. No.
Mr. Lively. But for smaller companies, and there are an
awful lot of small specialized meat companies that we think
could do very well in the export market, with a little more
streamlining in the way the branded program offers.
Mr. Welch. Well, I would be interested in that. You know,
Vermont, we focused on this branding and the Vermont brand, my
local farmers tell me really helps them with sales. So we have
to protect a brand and promote a brand. That makes a lot of
sense.
Mr. Hamilton.
Mr. Hamilton. Sure. Two things. Number one, and this
follows up on what Mr. Lively said. The USDA has been in the
process for about 3 years of issuing new regulations that
govern the MAP Program that we feel would make it much more
accessible and much more applicable in today's market. The
regulations that exist right now were written before electronic
marketing became common.
Mr. Welch. Right.
Mr. Hamilton. And in the international marketplace that is
extremely important now. So the issuance of those new
regulations on the MAP Program would be number one.
Number two I would say often lost in the conversation in
terms of FAS's capabilities are their locally-engaged staff at
their embassies around the world.
Mr. Welch. Right.
Mr. Hamilton. You hear often about the Foreign Service
officers, but there is a tremendous amount of expertise on the
local staff that are hired, that have the relationships with
the industries.
Mr. Welch. Let me stop you there. That is a good point. I
just have a little time. I wanted to let Mr. Nikolich speak,
too. Thank you for that.
Mr. Nikolich. Number one, harmonize MRLs, maximum residue
limits, so that everybody is on the same page and that they are
science based, so that they make sense.
Number two would be flavor sells. Phytosanitary quarantine
treatments are difficult to issue, to contend with. Some of
those treatments diminish the flavor and quality of our stone
fruit, and to the extent that research can be done to improve
that situation the better off industry will be.
Mr. Welch. Thank you. I yield back.
The Chairman. Thank you. The gentleman from Indiana, Mr.
Stutzman.
Mr. Stutzman. Thank you, Mr. Chairman. My question is for
Mr. Lively. After the BSE incident the beef market took a huge
hit. While beef exports have finally rebounded a little since
then in over $4 billion in 2010, it is only 84 percent of 2003
levels.
How important has USDA's Emerging Markets Program been to
restoring market access lost due to the BSE-related import
restrictions?
Mr. Lively. Thank you, Congressman. Yes. We did achieve
this year for the first time since the BSE problem emerged in
2003, the value of exports that we had that year, but as you
point out, the volume still falls short of our 2003 level.
In my opinion as I touched on in my testimony, and the EMP
Program was critical to our ability to respond to this problem
in emerging markets, of course, which excludes markets like
Japan and Korea and Taiwan. We have used Emerging Markets funds
to support bringing, as I mentioned, officials from countries
like Mexico, the Philippines, Egypt, et cetera, to the U.S.
Fundamental to getting past where we are today or where we were
at least then on the BSE problem is convincing governments that
we do have the controls in place, and frankly in many cases
bringing them up to speed on the science of BSE and the science
of risk assessment.
So countries reacted quickly to that crisis, they took
positions, which became policies, which became very difficult
to change. So over time this educational effort, this, if you
will, capacity-building effort with foreign officials has been
critical. We are now back in specifically in two of the
emerging markets that I mentioned in Egypt and the Philippines.
We now have restored complete access for U.S. beef. So we do
consider that a victory. We still have a long way to go in some
other places.
Mr. Stutzman. Mr. Censky, in your testimony you mentioned
how much the EU is spending on export promotion. Given the
large amount of money our competitors spend on their own
exports, how important do you believe the partnership is
between FSA and our small and medium-sized agribusinesses, and
are we getting the value for the dollar spent?
Mr. Censky. I think we are. It is, number one, it is
extremely important, and we are getting the value. The
government funding is actually attracting more dollars. In the
case of the soybean industry ourselves, we are investing $2 for
every dollar in funding that we receive under those programs,
and so definitely we are expending our own resources and want
to make sure that it is as effective as possible and that we
are moving the needle.
And we definitely, I mean, just the fact that we have moved
from just soybeans, being a relatively minor commodity 40, 50
years ago, to where we are today at over $23 billion in exports
shows the importance of foreign market development.
Mr. Stutzman. In the last 2 minutes here and each of you
could answer this briefly, are you seeing new interest from
producers to export products? You know, a lot of times we look
within our own small world sometimes, but is there new
interest? Is there the demand that is there that people are
producing more, and they are saying, well, where can we start
marketing our products and approaching you all?
You had mentioned a yogurt facility. Are there other
sectors that are starting to grow? Obviously, with beef we have
a long way to go, and we know our possibilities there, but any
new emerging markets?
Mr. Hamilton. I guess what I would say to this because this
is our day-to-day challenge is how do we convince small
companies that they should be exporting. Only about 94 percent
of U.S. companies don't export. The challenge isn't just
economic. It is cultural. We as a country are not known for our
exporting capabilities among small companies. We have never
really had to do that as an economy, and so since the President
has come out with the National Export Initiative, that has
created some more interest among people who are starting to
think, oh, maybe this is something that could apply to me.
And so, the important thing, at least in the small
companies that we work with, is they need to hear from somebody
with influence that this is possible. And so as you are out
talking to people, I think it would behoove you, and it would
certainly help us if they were hearing from people that this is
something that small companies can be successful at.
Mr. Stutzman. Absolutely. I agree, and I actually just came
back from a trip to the Middle East, and there is opportunities
in Saudi Arabia and other emerging markets. That is one of the
jobs I feel is to go back home and let folks know that there is
opportunity there, and I know especially with agriculture we
are feeding the world and have a lot of opportunities.
So thank you for what you all do, and I appreciate you
being here today. Mr. Chairman, I yield back.
The Chairman. Thank you. I now call on the distinguished
Ranking Member, Mr. Costa, for a couple questions.
Mr. Costa. Thank you. Two questions.
One to Mr. Lively. You have spent many years dealing with
the beef industry across the country, the livestock industry.
Can you give this Committee a sense of some of the challenges
we face? I know you have spoken earlier.
I mean, we do such a great job, in terms of not just
industry standards, but health and safety. I have three packing
plant operations in my district. Obviously, we have a little
issue with CHPSA right now, but the BSE as you referred to it
and the concerns about mad cow disease and others, and we have
penetrated Japanese and South Korean markets and other Asian
market as well. We have competitors obviously with Australia
and South America.
But some of these issues that are raised by these
countries, where we find good customers for, they fall under
the category, I guess, of non-tariff trade barriers because
what happens is is, for example, the bone end found in South
Korea a year and a half ago. How do we deal with this? How do
we cut through the fact that these folks are simply being
protectionists?
Mr. Lively. You know, you raise an excellent point,
Congressman, and it is key to our ability to succeed without a
doubt in exporting both beef and pork. The BSE episode has
taught us all a lot of lessons, I guess I would say, but one of
those is that we have to be consistent, we have to be diligent
in the way we approach these countries. We have to remember
that once countries close their doors, we are there knocking on
the door trying to get back in. Whether they are what we have
all seen, and we could all say this on this panel, whether
there is science to back up the position that the country's
taking or not, they are in control. I mean, they are the ones
who make the decisions.
I think we are going to have to stay on these issues and
truthfully, as a country we are going to have to be consistent
in the way we apply these rules. When we approach other
countries and criticize them for their non-science-based
positions and then sometimes in our case our position, too, is
less than consistent. That makes it difficult.
Mr. Costa. I think the trucking issue earlier referenced
was a good example of that. I think in that case we were wrong.
I mean, we weren't complying.
My last question, Mr. Nikolich, I think you have done a
good job of explaining the various challenges that we have in a
lot of specialty crop areas, including stone fruit, and you
talked about the minimum residue levels that sometimes are
raised on these phytosanitary issues and trying to be
consistent.
I would like you to just explain to the Committee, though,
and you referenced it in fumigants, both in fumigants and
treatment of fruit products for export purposes but also the
impact for soil fumigants and the challenges we are having
right now in terms of the registration and finding
alternatives. Because obviously a good tasting fruit is what
you need to sell, and I promised the Chairman here that I would
provide him some good tasting stone fruit here as the season
comes upon us.
But the fumigant issue still is a real problem.
Mr. Nikolich. It certainly is. Methyl bromide has
advantages in that it is very effective on a target pest, and
it also disappears, so residues of methyl bromide on exported
fruit really are not the issue. And so we need to have
reasonable science-based approach to the use of fumigants.
There is an awful lot of pressure on our industry in terms of
the use of pesticides in general, and there is an awful lot of
folks that don't believe there is any manmade chemical that is
any good for anyone, and so that is a real challenge to
overcome.
Whether it be soil fumigants, quarantine treatments, we
really do need to have a science-based reasonable approach.
Science has really suffered in this enterprise in terms of the
alternatives we have, and there is also the component there of
negotiating with our export partners to allow certain practices
and fundamental approaches to the way we do things in terms of
phytosanitary and quarantine practices that I think could yield
results if we could pursue those.
Mr. Costa. Well, my time has expired. Mr. Chairman, I want
to thank you for a good hearing. This is a continuing
conversation that we must continue to have as it relates to
risk assessment and risk management, realizing that everyone
wants to ensure that we have the gold standard, and we apply it
as it relates to both pesticides and herbicides, that these are
necessary tools. The fact is we don't do as good a job as we
should, I guess is what I am trying to say, in trying to
explain the comparative risks of assessment for the risk
management and the safety features that come from it. I mean,
if people eat healthy diets, you have far less risk than from
obesity and the other tradeoffs.
But we will continue to do a good job with this
Subcommittee, Mr. Chairman, and we appreciate your leadership.
The Chairman. Thank you, Mr. Costa, and thank you to the
panel. In absentia thanks to Mr. Brewer, to our respective
staffs, and for the audience. I think this has been a very
productive hearing which we intend to continue. I think it is
safe to say that the agricultural sector is our superstar of
exports, and we want to do everything we can to make sure that
that continues and flourishes.
This hearing of this Subcommittee is adjourned.
[Whereupon, at 11:28 a.m., the Subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]

Submitted Letter by Berry Bedwell, President, California Grape and Tree
Fruit League
April 14, 2011

Hon. Timothy V. Johnson,
Chairman,
Subcommittee on Rural Development, Research, Biotechnology, and Foreign
Agriculture, House Committee on Agriculture,
Washington, D.C.;

Hon. Jim Costa,
Ranking Minority Member,
Subcommittee on Rural Development, Research, Biotechnology, and Foreign
Agriculture, House Committee on Agriculture,
Washington, D.C.

Re: April 7th hearing to review market promotion programs and their
effectiveness on expanding exports

Dear Chairman Johnson and Ranking Member Costa:

The California Grape & Tree Fruit League (League), is a public
policy agricultural trade association representing the State of
California table grape and deciduous tree fruit industries; our members
produce fresh fruit throughout the state and include: Coachella Valley
(table grapes), San Joaquin Valley (all commodities), Santa Clara
County (cherries), Lake County (pears), as well as Mendocino, Yuba,
Stanislaus, San Joaquin and Sacramento counties (pears, plums,
cherries, kiwi, apricots). The League provides technical assistance and
advocacy for the membership on a wide array of issues, including
international trade, marketing regulations, product transportation, and
packaging and labeling requirements.
We appreciate our industry's opportunity to provide additional
comments to the April 7th hearing record. Our industry utilizes
programs such as the Market Access Program (MAP) and Technical
Assistance for Specialty Crops (TASC) to supplement industry funding to
establish and expand export markets for the California grape and tree
fruit sector. We appreciate this opportunity to describe the positive
impact that these programs have had on the League's members.
One of the League's most important uses of Federal funding in
recent years has been a TASC grant to offset the costs of Mexico's
burdensome inspection program for California stone fruit. Mexico
restricts the import of California stone fruit using an exaggerated
quarantine pest list, onerous penalties for pest interceptions and
protocol infractions, and by requiring excessive Mexican oversight of
U.S. officials and the stone fruit industry in California. The
introduction of new pests into California in the past few years,
including light brown apple moth (LBAM) and European grapevine moth
(EGVM), has resulted in increased oversight of the California stone
fruit export program by Mexican officials.
The costs for the inspection oversight that Mexico charges to the
stone fruit industry have increased annually, pushing some smaller
exporters out of the export program. To maintain the program and ensure
related costs do not become prohibitive, the League has received TASC
funding for technical assistance and to ensure participation fees do
not become prohibitive for California stone fruit shippers. This has
allowed small businesses to continue exporting to Mexico, and has
prevented the U.S. from losing Mexico as a market while officials
negotiate a more permanent solution to Mexico's import requirements.
TASC funding has ensured that, despite the oversight program and a
variety of other difficulties facing exporters, Mexico remains the
second largest export market for the California tree fruit industry.
California shippers exported two million cartons of stone fruit to this
market in 2009, valued at $32.6 million. This is especially important
as many shippers depend on the Mexican market to consume a size and
quality component of annual production that is not easily marketed in
the U.S. or in other export markets.
Like TASC, MAP is also a vital component to the California grape
and tree fruit industry's export success. Though the League does not
directly receive MAP funding, our members frequently benefit from MAP
activities through other industry associations that participate in the
program. MAP has helped to establish California as one of the world's
leading suppliers of high-quality grapes and tree fruit. According to
the California Department of Agriculture (CDFA), California
agricultural exports increased 66% from 2003 to 2009. Without the
opportunities to open new markets offered by MAP, this type of growth
would not be possible.
Programs benefiting specialty crop exports are absolutely vital in
this age of global agricultural competition. The small scope of U.S.
export assistance programs pale in comparison to the subsidies and
assistance provided by other major grape and tree fruit suppliers such
as China, Brazil, India, and the European Union. Further, MAP, TASC,
and other U.S. Department of Agriculture export development programs
help U.S. agricultural producers confront and overcome many of the
tariff and non-tariff barriers they face globally.
MAP and TASC have consistently shown to be wise investments for the
U.S. Government. Through increased exports and new employment
opportunities, these programs pay back significant returns on the
program outlays. The MAP and TASC programs are relatively small items
in the federal budget, but they have an enormous positive impact on the
livelihoods of many communities in California and across the country.
Considering the importance of these programs to the League's
members and U.S. agriculture in general, we respectfully ask that you
continue to fund MAP, TASC, and other export assistance programs at
their full authorized levels. This will help the grape and tree fruit
industry to continue increasing exports and providing new employment
opportunities.
Thank you once again for this opportunity to comment.
Sincerely,

Berry Bedwell,
President,
California Grape and Tree Fruit League.
______

Submitted Statement by Susan Brauner, Director of Public Affairs, Blue
Diamond Growers; Executive Member, Coalition to Promote U.S.
Agricultural Exports; Member, National Council of Farmer Cooperatives
Good morning, Mr. Chairman, Ranking Member Costa, and Members of
the Subcommittee. My name is Susan Brauner. I am Director of Public
Affairs for Blue Diamond Growers and an Executive Member of the
Coalition to Promote U.S. Agricultural Exports and a member of the
National Council of Farmer Cooperatives.
On behalf of Blue Diamond's grower-members, and over two million
farmers and ranchers who are members of farmer cooperatives, I am
pleased to provide testimony about our vital export programs, and
respectfully request that this statement be made part of the official
hearing record.
Blue Diamond Growers is a 100 year-old agricultural marketing
cooperative owned and governed by over 3,000 California almond growers
who average about 60 acres of almonds each. They market their brand
under the Blue Diamond label to 95 countries worldwide. California
almond growers produce 82 percent of the world supply, 100 percent of
the U.S. supply of almonds and export 70 percent. A majority of the
almonds exported are sold for further processing as an ingredient in
other foods.
Without Blue Diamond, members would not be able to pool their
resources to market and process almonds successfully in the global
market. Industry earnings from export sales are currently valued at
over $2 billion. Cooperative growers receive their share of these
earnings as patronage dividends which are spent in Northern California
communities where the almonds are grown. In turn, over 20,000 jobs
related to the almond export business are generated in California.
The United States must continue policies and programs that allow
American agriculture to compete in a global marketplace that is still
governed by unfair foreign subsidies and market access restrictions.
Unfortunately, U.S. branded products are at a disadvantage in foreign
markets where a country's own brand dominates. In addition, almonds
compete with foreign grown almonds and with other nuts that may be more
accepted in the culture. In the European Union (EU), for example,
almonds for snacking are accepted by approximately 4 percent of EU
consumers on average. According to the WTO's most recent statistics,
the EU is also providing $1.4 billion in advertising and marketing
activities to support their agricultural sector. It is expected that
the EU will increase this spending based on a recent EU resolution
passed by Parliament. Two-thirds of U.S. almonds are exported to EU
countries! EU funds spent on advertising their brands and products
clearly put the U.S. at a competitive disadvantage.
Currently funded at $200 million, down from a $325 million level,
MAP is the only tool many in agriculture have that is accepted under
WTO rules to counter unfair foreign trade practices. This current
funding level has not changed in 10 years, and a strong case can be
made that as more countries struggle to compete in the global
marketplace, unfair trade practices are at an all-time high. The
program is the most efficient, cost-share government program that
requires one hundred percent matching funds by branded programs. In
addition to the matching fund requirement, Blue Diamond funds its own
research, export team and their travel, and all other expenses related
to international trade. Participants can only be small business,
nonprofit agricultural trade associations, nonprofit agricultural
cooperatives and nonprofit state regional trade groups.
A recent independent USDA-commissioned audit of MAP and other USDA
trade programs prepared by HIS Global Insight, INC confirmed that MAP
uses government funds to supplement, not replace, industry funds.
According to the report, the increase in market development spending by
government and industry from 2002-09 enlarged U.S. market share and
increased the annual value of U.S. agricultural exports by $6.1
billion. This equates to $35 in agricultural export gains for every
additional $1 expended, a 35 to 1 return on investment!
The report also showed that from 2002-09, export gains associated
with the programs increased average annual farm cash receipts by $4.4
billion and net cash farm income by $1.5 billion. It further confirmed
that, due to higher prices from increased demand abroad, U.S. domestic
farm support payments were reduced by roughly $54 million annually,
thus reducing the net cost of these U.S. programs.
Many of our competing countries are completing their own bilateral
trade agreements and have committed to increasing their support of
advertising and marketing activities. European countries, for example,
are expanding their promotional activities in other regions including
Asia, Latin America and Eastern Europe. Canada, Australia, New Zealand,
Chile and Brazil have also invested in significant promotional
activities worldwide.
The almond industry has invested in MAP activities in India and
China where market growth potential outranks all other regions.
Shipments over the last five years have tripled to India and have
nearly doubled over the same time period annually in China! These two
markets alone are returning nearly $500 million back to rural
communities in California on an annual basis!
Returns on investments like these are tangible examples of how
sound public policy and partnership with government can benefit
Americans. To remain competitive, it is vital that programs like MAP
continue in the 2012 Farm Bill and beyond. The current application
process and oversight works well and should not be altered. Targeting
funds to specific sectors is not a viable long-term policy for success
in foreign markets.
Thank you for this opportunity to provide comments to the Committee
and for its leadership on U.S. agriculture exports. We ask for your
support and recognition of the attributes and return on investment that
the Market Access Program provides to our farmers and ranchers and to
our rural communities in an increasingly competitive global
marketplace.
______

Submitted Letter by Guy P. Cotton, Grower Direct Marketing
April 15, 2011

Subcommittee on Rural Development, Research, Biotechnology, and Foreign
Agriculture, House Committee on Agriculture,
Washington, D.C.

Dear Subcommittee Members,

My name is Guy Cotton, and I serve as Managing Director of Grower
Direct Marketing. As an exporter of California cherries that has close
experience with the Market Access Program (MAP) and Technical
Assistance for Specialty Crops (TASC), I appreciate this opportunity to
provide my thoughts on their effectiveness. After witnessing the
difference these programs have made in the California cherry industry,
I am a firm believer that MAP and TASC merit your continued support.
MAP and TASC funding are used by the California cherry industry
through the California Cherry Advisory Board (CCAB). CCAB has used MAP
funding very successfully to promote California cherry sales,
especially in Asia. For example, cherry sales to Korea increased 22.5%
by value to $17.4 million in 2010. Grower Direct Marketing contributed
to this success, exporting $1,200,000 worth of cherries to Korea in
2010. This increase is an obvious sign that the industry's message that
California cherries are healthy and high-quality is resonating among
Korean consumers. Without MAP funding, the significant expansion we
have seen in the Korean market would be much more difficult.
Similarly, MAP funding has contributed greatly to strong growth in
the Japanese market. California cherry exports to Japan grew to $56.7
million in 2010, an increase of 16.7% over 2009. Grower Direct
Marketing exported 165,000 cartons of cherries worth approximately
$6,600,000 to Japan. The successful retail promotions and advertising
that have driven this growth are attributable to the combined effort of
industry and MAP funding.
The TASC program is also an important tool that can help the
California cherry industry increase exports. As mentioned above, the
introduction of new quarantine pests creates a challenging environment
for exporting California cherries. TASC provides a way to quickly
address technical trade barriers as an industry, resolving issues that
would otherwise close a market. In this way, the TASC program is an
important safety net for the California cherry industry. While the cost
of most TASC projects is typically fairly low, they produce a
significant impact by keeping markets open or enabling specialty crop
producers to expand their exports to a market.
MAP, TASC, and other agricultural programs are sometimes targeted
for budget cuts by those that do not understand their value. However,
my experience with MAP and TASC have shown that these provide benefits
that far exceed the cost of the programs. Even considering only the
increase in export value achieved through these programs, MAP and TASC
have displayed an enviable return on investment. When the additional
effects of improved pricing and employment growth are factored in, it
is clear that these programs are very successful and provide an
excellent return to U.S. taxpayers. For these reasons, Grower Direct
Marketing strongly supports full funding for MAP and TASC programs. We
respectfully request that you to do the same.
Thank you.
Sincerely,

Guy P. Cotton,
Grower Direct Marketing.
______

Submitted Statement by Wallace L. Darneille, President and Chief
Executive Officer, Plains Cotton Cooperative Association
Mr. Chairman and Members of the Subcommittee, I am writing on
behalf of the 25,000 stockholders of Plains Cotton Cooperative
Association (PCCA). I ask that this statement be included as part of
the record for your April 7 hearing regarding market promotion and
development programs administered by USDA's Foreign Agricultural
Service (FAS). The success of the Market Access Program (MAP) and the
Foreign Market Development (FMD) program is well documented, and I urge
Congress and the Administration to maintain funding for these programs
at the $200 million level as authorized by the 2008 Farm Bill.
Exports of U.S. agricultural products facilitated by MAP and FMD
play a key role in the U.S. economy and support 1.1 million American
jobs. Agriculture's trade surplus also helps reduce the United States'
overall trade deficit. Exports are vitally important to U.S. cotton
producers including the farmer-owners of PCCA. Today, the United States
exports more than 95 percent of its cotton as fiber, yarn or fabric.
Without those export markets, the U.S. cotton industry would be much
smaller than it is. Furthermore, our cotton producers could not compete
against the heavily subsidized foreign cotton in these export markets
without MAP and FMD funded programs.
With these programs, Cotton Council International (CCI) promotes
U.S. cotton, yarn and fabric in the world's major markets, and the
results are significant. A good example is Turkey, PCCA's top export
market during the past 10 years, where CCI has worked since the mid-
1980s. U.S. cotton exports to Turkey have increased 225 percent during
the past decade to more than 2.2 million bales, a 64 percent market
share, with an estimated value of $1.8 billion.
Another example is Vietnam where CCI has had a local representative
on the ground for the past four years. By sponsoring trade missions,
hosting seminars and working with Cotton Incorporated to carry out
technical servicing to local mills, Vietnam's imports of U.S. cotton
have increased 228 percent during that period, a 48 percent market
share, with a value of $303 million.
CCI's Sourcing USA program that promotes U.S. yarn and fabric sales
to Latin America has led to a 50 percent increase in sales to Caribbean
Basin countries since 2000, accounting for 90 percent of all cotton
spun in the United States. This success has ensured as many textile-
related jobs as possible remained in our country. It also has enabled
PCCA to invest in opportunities in Latin America to move up the value
chain for the benefit of our farmer-owners. These investments provide
the potential to add value to our farmers' cotton.
Earlier, I mentioned the competition we face from heavily
subsidized foreign cotton. A 2007 study produced by the Cotton
Economics Research Institute of Texas Tech University summarized the
farm policies of 21 countries for seven major crops including cotton.
The study found that the cotton policies of Brazil, the West African
Countries, and China include price support, direct payments or both for
their cotton producers. Brazil and China have single and two-tier (TRQ)
import tariffs, respectively, for cotton. Brazil's WTO bound import
tariff for cotton is 35 percent, and China's TRQ ranges from 5 to 40
percent on cotton imports above the quota amount. Prices received by
cotton producers in the West African Countries are strictly controlled
by government entities. Both Brazil and China provide credit subsidies
and transportation/storage subsidies, and China also subsidizes input
costs for fertilizer, irrigation, seed and energy. Thus, MAP and FMD
funding is needed to counter these and other foreign activities.
U.S. agricultural exports have been a strong and positive
contributor to our country's balance of trade for many years. By
increasing these exports, we improve the lives of our farmers, create
jobs, improve our balance of trade, and positively affect the economy.
I respectfully ask you to maintain the MAP and FMD programs to help
ensure the competitiveness of our producers in the increasingly
competitive global market.
______

Submitted Statement by Thomas C. Dorr, President and Chief Executive
Officer, U.S. Grains Council
Thank you, Chairman Johnson, Ranking Member Costa, and
distinguished Members of the House Agriculture Subcommittee on Rural
Development, Research, Biotechnology, and Foreign Agriculture for
holding this important oversight hearing to review U.S. market
promotion programs and their effectiveness in expanding exports of U.S.
agricultural exports.
My name is Tom Dorr. I am President and CEO of the U.S. Grains
Council (USGC). The Council appreciates the opportunity to submit this
formal statement and provide our views on why these marketing programs
are critical to the success in expanding U.S. agricultural exports.
USGC Structure and Objectives
Founded in 1960, The Council is a private, nonprofit corporation
with 10 international offices, representatives in 16 countries and
programming in more than 50 countries. Its unique membership includes
barley, corn and sorghum producer organizations and agribusinesses from
across the United States with a common objective in developing export
markets.
These members provide financial support along with member goods and
services contributions and foreign third party goods and services
contributions totaling $13.4 million in 2010. As an eligible cooperator
under the U.S. Department of Agriculture's Foreign Agricultural Service
(FAS) market promotion programs, the Council was able to leverage the
member and third party goods and services contributions and receive
$15.4 million, primarily for use under the Market Access Program (MAP)
and Foreign Market Development Program (FMD). This unique private-
public partnership enables the Council and FAS to jointly support the
development, maintenance and expansion of commercial exports of U.S.
agricultural commodities and products.
The singular focus of the Council is emblematic of our vision--
Developing Markets, Enabling Trade, Improving Lives. We accomplish that
vision with our ability to work with the food and feed sectors in
countries around the world to educate and demonstrate how they can
efficiently and effectively use feed grains to improve their ability to
grow their industries. This, in turn, enables them to provide their
consumers with safe, affordable food that improves their standard of
living.
The underlying premise of export market development is take
advantage of potential market opportunities where there is population
and economic growth that is generating a growing middle class looking
to improve their diets. To accomplish that requires transparent
government policies that comply with international trade rules and
regulations and as well as transparent market institutions and systems.
It can involve working with local agricultural industries to assist
them to learn how to address policy issues with their government in the
interest of their industry.
It also involves exposing food and feed industries to modern
production/management practices that increase their efficiency, quality
and profitability. It is responding to consumer demand issues (price,
quality, safety and preference). Finally, it involves engagement and
constant interaction with our customers through timely market
information and ensuring they understand how to utilize the
information. In essence, it is about bringing change to institutions,
policies, relationships .That in turn, serves as the catalyst for
entrepreneurial U.S. companies to pursue these market opportunities
which creates economic value both here domestically but also in our
partner countries.
The many Council programs and activities include:

Capacity-building to the aquaculture, livestock, poultry and
dairy sectors in best management practices and training in feed
formulation and price benefits associated with using corn,
sorghum, barley, and important co-products such as distiller's
dried grains and other important value-added products;

Marketing and promotion of food uses;

U.S. grain trade promotion through grain marketing and risk
management training for grain importers;

Working with governments to establish rules-based
regulations on grain standards, food safety, biotechnology and
transportation; and

Addressing tariff and non-tariff barriers that are
constraints to trade.
Leveraging Market Development Programs
The Council's market development programs--capacity building;
direct trade from marketing efforts; addressing market access
barriers--emanate from the Unified Export Strategy (UES) that is
developed annually and forwarded to FAS for their consideration and
approval. The UES serves as the blueprint for the various planned
programs and activities that the Council anticipates will be
implemented.
MAP provides the majority of the funding for USGC market promotion
activities. For example, through these funds, U.S. sorghum checkoff
investments in international marketing efforts pay significant
dividends, as evidenced by USDA's record of sorghum exports to Morocco.
According to USDA, Morocco went from importing no U.S. sorghum in the
2009 marketing year, to 123,000 tons (4.8 million bushels) valued at
$21 million in the 2010 marketing year. So far in the 2011 marketing
year through January, Morocco has imported nearly 48,000 tons valued at
more than $11 million.
Also funded in-part by MAP was the 2011 VIV-Asia Trade Show in
Bangkok, Thailand. The U.S. Grains Council and some of its members
recently took part in what is touted as the largest feed and livestock
industry show in Southeast Asia. According to preliminary survey
results, Council members generated an estimated $38,000 in on-site
sales from the event, including five brokerage trades.
Surveys also project that 12 month sales resulting from the show
will reach at least $195,000 for Council members. The Council's
participation in the biannual trade show allows it, and participating
members, the opportunity to meet with current and prospective contacts
and customers.
In addition, a portion of MAP funds are reserved for Global Based
Initiatives (GBI). The Council has utilized this initiative to help
form the Food and Agriculture Export Alliance (FAEA) in 2004 as an
effort to achieve more intensive cooperation among various commodity
groups. FAEA members include: U.S. Grains Council (Lead organization in
submitting GBI proposal); U.S. Soybean Export Council; U.S. Dairy
Export Council; USA Poultry & Egg Export Council; U.S. Meat Export
Federation--representing almost 40 percent of U.S. agricultural
exports.
The broad goals of FAEA are to enhance cooperation among commodity
groups in addressing Sanitary and Phytosanitary (SPS), Technical
Barriers to Trade (TBT), Codex and food safety issues; and to focus
more effectively on developing export markets for the benefit of U.S.
agriculture in general and of the U.S. grain-oilseeds-animal sectors in
particular.
FAEA has identified SPS regulations as an area of common concern to
its stakeholders. This is an area that has become increasingly
important as other forms of trade barriers are being eliminated through
multi-party trade agreements or bilateral negotiations. SPS is now
referred to as `the trade barrier of choice' and poses a threat to
existing and expansion of world agricultural trade.
The next GBI project, which began in 2007, provided for multi-year
efforts in Vietnam to encourage development and implementation of food
safety laws and regulations. The project goal was to increase consumer
confidence in the safety of meat, milk and eggs, leading to accelerated
demand growth; and to provide reasonable food safety rules that ensure
access for imports from the United States to meet that growing demand.
Beginning with the 2008 GBI FAEA developed and supports an English/
Mandarin website containing U.S. government documents on food safety.
The purpose of the website is to enable Chinese government officials to
understand U.S. food safety regulations and practices. That
understanding will form the basis for development of Chinese food
safety regulations in harmony with U.S. regulations. This 2010 GBI
introduces a new opportunity for FAEA to cooperate with the Chinese
food safety agency AQSIQ to help build harmony between central
government regulations and actual practices in the provinces.
Equally important the FMD program provides cost-share assistance
for the Council's efforts to support overseas market development
activities to remove long-term impediments to increased trade
opportunities.
The presence of distiller's dried grains with soluble (DDGS), a co-
product of U.S. ethanol production, is gaining popularity in markets
around the world. U.S. corn producers send their corn to U.S. ethanol
plants and receive added value for their crop from DDGS, a widely used
feed ingredient in the United States.
In the 2010 marketing year, many notable markets drastically
increased their imports of U.S. DDGS. These markets include Chile,
Morocco, Egypt, China, Japan and Thailand. The U.S. Grains Council
conducts educational seminars and feeding trials to increase
familiarity and usage of the U.S. feed ingredient.
MAP and FMD funds have allowed the Council to actively promote DDGS
around the world, increasing demand for the product and thus increasing
exports to reach 7.2 million metric tons in 2010 for a total of $1.4
billion dollars in sales.
The Quality Samples Program has been an integral tool to
introducing new products such as DDGS and other value-enhanced grains
into potential export markets. Through the use of QSP, the Council was
able to tender 60 metric tons of U.S. sorghum to Saudi Arabia in
February 2011 for commercial poultry feeding trials.
In Saudi Arabia, the government subsidizes feed grains--but the
subsidy varies from grain to grain. The country is the largest importer
of barley in the world but when global grain prices spiked in 2006-07,
the government began to look at other grains in order to diversify its
needs. Subsidy levels, however, continue to vary and are not always on
par with the value of the grain.
By conducting the trial, the Council aims to demonstrate the
feeding value of U.S. sorghum to Saudi Arabian feed manufacturers,
livestock producers and the government, which may then treat the feed
grain on a more equitable basis.
Finally, the Emerging Markets Program allows the Council and other
cooperators to carry out technical assistance activities that promote
the export of U.S. agricultural products and address technical barriers
to trade in emerging markets. USGC is targeting India as a high
potential priority emerging market. With its steadily growing
population and annual economic growth, India is emerging middle class
will undergo dynamic expansion and the need for increased protein in
their diets. The Council will identify and address the policy barriers
to trade and the best approach to resolve these issues. It will also
involve conducting sector specific market assessments in the food and
feed sectors and approaches to help build demand for feed products in
their dairy and poultry sectors.
Performance and Accountability
The Council has historically placed a high priority in
demonstrating performance and accountability in terms of the impacts of
its programs and activities to both FAS and to our members. USGC takes
the responsibility of appropriately and effectively utilizing Federal
tax dollars seriously. Over the entire period of participation of the
market development programs, the Council has consistently met the
requirements of the FAS Office of Compliance and Emergency planning.
In terms of the annualized value of the trade impact of USGC
activities, Informa Economics, a third party economic research firm,
reviewed the Council programs and the impact it had on trade. According
to this impartial analysis, the Council's efforts generated more $395
million in exports last year. This equates to almost $22 worth of
exported corn, barley, sorghum and DDGS for every $1 invested by
members and federal government. The increased demand from these exports
increased the price paid to U.S. farmers, generating more than $915
million in income for all U.S. feed grain producer, providing a return
of more than $50 in additional income for every $1 invested by the
Council.
The Council's objectives and strategies are assessed on a continual
basis through the prism of policy--not just trade policy but all
policies that can affect or impact demand, marketing and trade
facilitation. From the assessment of all of the Council's marketing
activities, the consistent theme was that policy constraints are the
overarching concern in over 60 percent of all target markets.
As a result, the Council has developed concise country market
assessment overviews that provide a snapshot of the current and
potential market opportunities; ranking of constraints that are policy,
demand, marketing or trade related; desired actions to address the
constraints; and specific performance measures to establish goals and
calculate gains against those goals. These measures will be
incorporated and supplement the existing benchmarks of our UES
submissions to FAS. An example of this document is provided as
attachment to the statement.
In an effort to build off of this effort, the Council is
coordinating an effort through a GBI initiative with other cooperators
that will develop a systematic methodology for measuring market
development gains and for relating programs to trade results across
multiple commodities, markets and issues. We believe that a more
comprehensive and coordinated methodology and information management
system will enhance the ability to allocate resources wisely and report
more accurately on the value of USDA-funded export market development
programs.
Growing Importance of International Trade
U.S. exports of agricultural commodities and products have grown
significantly over the last decade. The U.S. Department of
Agriculture's most recent announcement of a record $135.5 billion
dollars in projected U.S. agricultural exports for FY 2011 and its
continued growing contribution of a U.S. trade surplus demonstrate that
strong growth.
The opportunities for continued growth of U.S. agricultural exports
are potentially open-ended, particularly in China, India and Southeast
Asia. In addition, significant opportunities for strong growth of
agricultural commodities exist in our own hemisphere.
The Council strongly supports the Administration's National Export
Initiative and its aggressive goals of doubling U.S. exports in the
next five years and generating 2 million U.S. jobs, and growth. U.S.
agriculture has been a strong contributor and beneficiary of
participating in international markets.
However, if U.S. agriculture is to continue to be competitive and
take advantage of these tremendous opportunities, the U.S. Government
has to take a leadership role in liberalizing global trade rules and
regulations that will allow the U.S. agricultural sector to be the
world's most reliable supplier of food and feedstuffs.
We see great opportunity and progress if there is successful
ratification the existing free trade agreements with Korea, Colombia
and Panama; resolution of the decade-old Doha Development Round; and
completion of the 21st century Trans-Pacific Partnership agreement.
Without them, it will be extremely difficult to overcome market
access constraints and take advantage of the strong potential growth
opportunities. With global trade becoming increasingly important, the
need for these market development programs becomes even more vital,
particularly with strong competition from other trading partners that
are aggressively pursuing bilateral and regional trade agreements with
our most important customers.
Summary/Conclusions
In summary, open markets that provide for the free flow of trade
will be necessary if we are to meet the future needs of a growing world
population their food and nutrition requirement. The United States can
continue to be the world's most consistent and reliable supplier and
meet the needs of countries to be self-sufficient in food, fuel, feed
and fiber.
As this global demand continues to grow, it will have an increasing
role in providing economic returns to our nation's producers and
increase economic growth and promote new job opportunities. However,
market development programs will be even more critical if we are to
take advantage of these global opportunities.
Again, Mr. Chairman, Ranking Member Costa, and Members of the
subcommittee, I appreciate the opportunity to offer the views of the
U.S. Grains Council on these vital market development programs.
attachment
China
Market Snapshot--U.S. Grains Council

China Market Profile--Prepared January 2011, U.S. Grains
Council.
China
USGC Game Plan 2011--U.S. Grains Council

China Market Profile--Prepared January 2011, U.S. Grains
Council.
China
Weighted Performance Measures--U.S. Grains Council

China Market Profile--Prepared January 2011, U.S. Grains
Council.
Submitted Letter by Dennis Engelhard, President, United States Dry Bean
Council
April 15, 2011

Hon. Timothy V. Johnson,
Chairman,
Subcommittee on Rural Development, Research, Biotechnology, and Foreign
Agriculture, House Committee on Agriculture,
Washington, D.C.

Re: Comments for the Record for the Subcommittee's April 7, 2011 Public
Hearing to review market promotion programs and their effectiveness on
expanding export of U.S. agricultural products

Dear Chairman Johnson:

Please accept the following as comments of the United States Dry
Bean Council submitted for the record for the Subcommittee's April 7,
2011 hearing, the stated objective of which was to review market
promotion programs and their effectiveness on expanding export of U.S.
agricultural products. USDBC's purpose in submitting these comments is
to go on record as a strong supporter of the Market Access Program, the
Foreign Market Development Program, and other market promotion programs
of the U.S. Government. USDBC would like to appropriately recognize the
programs' effectiveness in helping to maintain our competitive position
and in expanding exports of U.S. agricultural products in general, and
U.S. grown dry beans, in particular.
USDBC is the sole national trade association representing all
segments of the domestic dry bean industry. Our membership includes
state and regional grower organizations, state and regional dealer/
shipper organizations, processors, canners, retailers, and other
entities in more than 35 states involved in the U.S. dry bean industry.
More than 20 classes of dry edible beans were planted on more than 1.7
million acres in the U.S. in 2010, producing dry beans with a farm gate
value approaching $1 billion.
As is the case with other U.S. agricultural commodities, dry bean
exports make up a significant portion of annual U.S. dry bean
disappearance, averaging about 35 percent of production. As a result,
effective export market promotion is fundamental to the continued
success and health of all segments of the U.S. dry bean industry. That
is why USDBC has been an active participant in the MAP, FMD, and other
export market promotion programs for a number of years, and has
annually adopted a position paper that, among other points, strongly
supports continuation of MAP and FMD at their full mandatory funding
levels. In Fiscal Year 2010, USDBC was fortunate enough to utilize
$1.08 million in MAP funds and $138,000 in FMD funds, along with
contributed dry bean industry funds, to generically promote U.S. grown
dry beans throughout the world.
Some examples of positive export progress that has resulted from
USDBC participation in these valuable programs for marketing years 2005
through 2010 follows:

Annual U.S. dry bean exports to the world increased 208
percent in value from $136,384,000 to $284,480,000;

Participation in USDA promotion programs helped U.S. dry
bean exporters capture more than 15 percent share of one the
world's largest bean consuming markets--Mexico. U.S. exports to
Mexico have increased 309 percent in value from $31,797,000 to
$98,364,000;

Angola, a former U.S. food aid recipient, became a major
importer of U.S. dry beans as a result of USDA funded market
promotion program activities. U.S. dry bean exports to Angola
have increased 367 percent in value from $2,292,000 to
$8,414,000;

USDA market promotion programs helped turn around exports to
canners in the United Kingdom, which were being lost to
competing suppliers in Canada, Ethiopia, and China. U.S. dry
bean exports to the United Kingdom increased 167 percent in
value from $15,193,000 to $25,461,000;

U.S. pinto beans have become the number one bean of choice
for Dominicans thanks to USDA funded trade service and consumer
promotion programs U.S. dry bean exports to the Dominican
Republic increased 300 percent in value from $7,760,000 to
$23,305,000;

With the help of USDA international market promotion
programs the U.S. Dry Bean Council encouraged Guatemala's
refried bean manufacturers to use new varieties of U.S. beans
in their manufacturing processes. U.S. dry bean exports to
Guatemala increased 368 percent in value from $1,990,000 to
$6,924,000.

As these examples show, the market promotion programs have
benefited all U.S. producers of dry beans by providing efficient and
effective overseas market development activities, such as market
research and analysis, educational seminars, trade missions, new
product development tailored to cultural and regional preferences,
participation in international food shows, and other innovative trade
servicing activities. They allow U.S. dry bean growers to compete on an
international playing field where U.S. dry beans face difficult
competition from subsidized producers of dry beans in countries such as
China, Canada and the European Union, a vital point since dry beans are
not a U.S. program crop and U.S. growers receive no price supports from
the U.S. Government. This last point is especially important in light
of the fact that market promotion programs, such as MAP and FMD, are
recognized to be acceptable components of trade policy by our
international trade organizations. USDBC has long believed that
eliminating these programs or significantly cutting their funding,
given the continued subsidized foreign competition we face, would be
tantamount to unilateral disarmament of this vital export component.
USDBC recognizes the difficult choices that are faced by the need
for governmental spending to be more fiscally responsible. In that
regard, we believe it is paramount that priorities be established for
those programs that have proven their merit and that deserve to be
maintained and preserved.
USDBC feels strongly that MAP and FMD clearly meet that criterion,
which was established in great detail by testimony received by the
Subcommittee in its hearing, i.e., agricultural exports being up more
than 300 percent since the inception of MAP and predecessor programs;
every billion dollars generated in U.S. agricultural exports supports
8,000 American jobs; every $1 spent in the promotion programs has
resulted in more than $35 in export activity; the positive balance of
trade enjoyed by agricultural exports continues to be one of the few
bright spots in our trade environment, etc.
Certainly, the above examples show how these promotion programs are
providing a significant return on investment for both the U.S. taxpayer
and the U.S. dry bean industry. Consequently, USDBC is proud to express
its continued support for, and recognition of the vital and helpful
role that MAP and FMD play in allowing U.S. agricultural products in
general, and U.S. dry beans in particular, to maintain and expand our
competitive position in international markets.
Thank you for the opportunity to submit these comments for the
hearing record.
Sincerely,

Dennis Engelhard,
President,
United States Dry Bean Council.
______

Submitted Statement by Ken O. Keck, Executive Director, Florida
Department of Citrus
The Importance of Market Access Program (MAP) Funding to the Florida
Citrus Industry
We commend the Subcommittee on Rural Development, Research,
Biotechnology, and Foreign Agriculture for holding a hearing to review
market promotion and development programs administered by USDA's
Foreign Agricultural Service (FAS). We appreciate the opportunity to
share information about the importance of Market Access Program (MAP)
funding to the Florida citrus industry and respectfully request that
this statement be made part of the official hearing record.
The Florida Department of Citrus (FDOC), a FAS cooperator, is an
executive agency of Florida government having the statutory mandate to
``protect the health and welfare, and stabilize and protect the citrus
industry of the State.''
The FDOC represents the interests of the entire Florida citrus
industry, which includes all geographic regions and organizations
involved in the growing, packing, processing, shipping and selling of
fresh and processed grapefruit, orange, and specialty citrus products.
That representation includes approximately 45 citrus packinghouses and
20 citrus processing plants, and over 8,000 growers, many of whom are
small family operations. It is especially the small family growers that
are dependent on the FDOC's promotional efforts for reliable market
movement and strong consumer demand. Without the FDOC's consistent and
steadfast marketing efforts over the years, many of the smaller family
operations would not exist today.
The FDOC has been involved in the world market since its inception
in 1935, and has had a very successful relationship with FAS as a
participant in the Targeted Export Assistance (TEA) program since 1986-
1987 and the Market Access Program (MAP) since the early 1990s. Despite
global involvement for nearly 75 years, the Florida citrus industry's
international business did not truly develop until the FDOC's
participation in the FAS programs.
Today, the Florida grapefruit industry is dependent on
international trade for its survival. In the mid-1980s, only about 35
percent of Florida's fresh grapefruit crop was exported. In the last
five years, the overwhelming majority (over 65 percent) of the fresh
crop was exported. Similarly, grapefruit juice exports in the mid-1980s
comprised less than 10 percent of the total business; today over 35
percent of Florida's grapefruit juice production is exported. Florida
is now recognized as the world leader in fresh grapefruit and
grapefruit juice exports. This would not have been possible without FAS
support.
Eliminating or reducing funding for MAP in the face of continued
subsidized foreign competition would put the Florida citrus grower and
workers at a substantial competitive disadvantage. In recent years, the
European Union and other foreign competitors devoted considerable
resources on various market development activities to promote their
exports of agricultural products. A significant portion of this is
carried out in Europe, which is a vital market for Florida citrus
products.
In addition to its market growth since the inception of the TEA
program, Florida is considered by the international trade and foreign
consumers as the premium supplier of citrus products. This position is
verified annually in tracking studies conducted in countries where the
FDOC executes programs. The premium positioning, created through
marketing programs funded by MAP dollars, has allowed Florida exporters
to price their products at a premium to competition. Pricing above
foreign competition provides the more than 8,000 Florida growers with
the opportunity to optimize returns on their crops, hence assuring
long-term viability for the citrus industry. This is critical to an
industry that employs more than 76,000 people and provides a $9 billion
annual impact to the State of Florida.
Because unemployment is of such critical concern to our nation, and
is so acute in Florida today, we have performed an analysis of the
employment directly attributable to the continued full funding of the
MAP program, by selected Florida Congressional Districts. This analysis
reveals that today almost 1,500 jobs throughout the citrus growing
region of Florida rely directly on the approximate $5 million provided
by MAP to the Florida Department of Citrus.
Thank you for the opportunity to provide information to the
Subcommittee. On behalf of the Florida citrus industry, we ask that the
MAP and other vital FAS programs be sustained to help ensure the
competitiveness of American agricultural producers in the increasingly
competitive global marketplace.
Respectfully submitted,

Ken O. Keck,
Executive Director,
Florida Department of Citrus.
charts

Submitted Letter by Chiles Wilson, President, Rivermaid Trading Company
April 15, 2011

Subcommittee on Rural Development, Research, Biotechnology, and Foreign
Agriculture, House Committee on Agriculture,
Washington, D.C.

Dear Members of the Subcommittee,

Thank you for this opportunity to indicate our strong support for
U.S. agricultural export programs such as the Market Access Program
(MAP). As President of Rivermaid Trading Company, I have seen firsthand
the impact that MAP funding has had on our company and the California
pear industry as a whole.
Due to a variety of factors, including high input costs and
declines in demand for pears, the California pear industry has
struggled in the domestic market in the past several years. MAP funding
granted to the California Pear Advisory Board (CPAB) has allowed pear
shippers such as Rivermaid to expand export markets and continue to
thrive.
CPAB has used MAP and industry funds to conduct a very successful
marketing program in Canada. Without the support of MAP funding, the
industry's small and family businesses would not have the resources to
aggressively promote their pears in the Canadian market. By pooling
industry resources and leveraging MAP assistance, California pear
shippers have been able to maintain a strong presence in Canada. In
2010, Rivermaid exported 1,992 tons of pears worth $1,872,552 to Canada
in part due to the marketing support provided by the MAP program.
Mexico is also an important market for the California pear
industry, and one where MAP funding is equally important. Despite
setbacks for the industry related to Mexico's retaliatory tariffs on
U.S. pears, MAP grants have allowed CPAB to continue working with
retailers to put on successful promotions to increase California pear
sales. Rivermaid shipped $1,132,145 worth of pears to Mexico in 2010.
As these examples demonstrate, MAP plays a vital role in assisting
California's pear farmers to market and export their products abroad.
With approximately 19% of the California fresh pear crop going to
foreign markets, Rivermaid Trading Company and other industry members
depend on the programs that MAP supports. The program is a shining
example of a government-industry partnership that results in solid,
noticeable returns for U.S. agricultural producers and the rural
communities that they sustain.
Another important program is the Technical Assistance for Specialty
Crops (TASC) grant, which provides the California pear industry with a
way to respond quickly when new technical trade issues arise. Sanitary
and phytosanitary issues are increasingly being used as trade barriers
around the world, and the TASC program has been used to provide the
California specialty crop industry with the information, research, and
systems needed to address these issues and keep export markets open.
TASC is a welcome source of support, especially considering the number
of invasive pests that have become established in California in the
past few years. The program is a valuable resource that allows the
California pear industry to fight against and eliminate technical trade
barriers that would otherwise significantly restrict trade.
I realize that in this time of tight budgets, Congress is looking
for places to cut programs. However, the value of the MAP and TASC
programs and the difference they make to Rivermaid and other U.S.
agricultural producers' bottom line cannot be overstated. I urge you to
continue funding these agricultural export programs at the maximum
levels provided for in the farm bill.
Thank you again for considering my comments on this important
matter.
Sincerely,

Chiles Wilson,
President,
Rivermaid Trading Company.
______

Submitted Statement by American Seed Trade Association
Chairman Johnson and Members of the Committee, thank you for the
opportunity to provide a statement for the record supporting the U.S.
Department of Agriculture's (USDA) cooperator programs and their
effectiveness on expanding exports of U.S. agricultural products. On
behalf of the American Seed Trade Association (ASTA) and its more than
700 members, we are pleased to provide comment to the Committee
regarding the importance of these programs and the American seed
industry's participation in them.
Who We Are
Founded in 1883 and located in Alexandria, VA, ASTA is one of the
most established trade organizations in the United States. Our
membership is involved in production and distribution, plant breeding
and related industries around the globe. As an authority on plant
germplasm, ASTA advocates science and policy issues important to the
industry.
ASTA's mission is to be an effective voice of action in all matters
concerning the development, marketing and movement of seed, associated
products and services throughout the world. ASTA promotes the
development of better seed to produce better crops for a better quality
of life. Our members represent all areas of the seed industry--from
alfalfa to zucchini and range in size from small and medium regional
seed companies, to large multi-nationals. ASTA members develop and
market seed produced through conventional plant breeding, organic and
modern biotechnology techniques.
Ninety-two percent of ASTA's active members are small businesses
that report annual sales of less than $16 million. Without ASTA's
efforts overseas, supported by cooperator program funding, many of
these small- to medium-sized companies would not have a representative
in key markets. Company participation and access through the programs
result in jobs at the local level, increased global sales and
profitability.
Importance of Seed
The U.S. seed industry is one of the most dynamic in the world. It
is also increasingly subject to the forces of globalization. The U.S.
seed industry has a commercial value of approximately $12 billion. With
more than 60,000 varieties of planting seed, the United States is the
largest and most diverse planting seed market in the world.
An important breeding and technology center for the global seed
industry, the United States attracts the largest and most viable seed
companies from around the globe. The seed industry is poised to
continue to invest a large share of its revenue in research and
development in techniques such as genetic engineering and traditional
and marker assisted breeding to develop beneficial novel traits and
improved germplasm. In the seed industry, there has been a shift in
global research expenditures from the public sector to the private
sector. Private expenditures during the past two decades have outpaced
those of the public sector. This trend was brought about by such
factors as increased return from planting seed exports, improved
intellectual property rights protection, and the entry of life science
companies into the planting seed industry. This trend benefits the U.S.
farmer, agricultural commodity groups, food and feed industries. This
is especially true for members of the seed industry, where the
overwhelming majority of seed companies are small and medium in size
and resources.
With the global commercial market for planting seed estimated at
$38.5 billion, the U.S. market is estimated to be 30 percent of the
global market. The domestic share of U.S. seed exported is equal to
approximately $1.25 billion which is approximately 10 percent of the
overall value of the U.S. seed industry.
A number of factors are needed to support export growth including:

International regulations that promote the movement of seed

Improved global economic conditions

Liberalized government agricultural and trade policies

Global acceptance of biotechnology and science based
regulations

Bilateral and multilateral free trade agreements

Adoption and enforcement of intellectual property rights

Elimination of phytosanitary constraints to trade

Science based policies and regulations

Better understanding for how seed moves globally

Increased demand and familiarity of U.S. cultivars and seed
technology

In many emerging markets, it is estimated that formal seed commerce
accounts for only 10-20 percent of their total market with the
remaining 80-90 percent supplied by the non-commercial or informal
market (i.e., farmer saved seed). The global market for seed still
shows great potential for future introduction of improved U.S.
varieties. However, the implementation of robust intellectual property
regulations, particularly in emerging markets around the globe, is
necessary for the widespread introduction of these new and improved
varieties.
As a Cooperator of the USDA's Foreign Market Development (FMD) and
Market Access (MAP) programs, ASTA has been involved in export
promotion and development activities for more than 50 years. ASTA does
not have an overseas staff, which means the association and its members
rely heavily on the USDA-Foreign Agricultural Services' (FAS) offices
overseas. ASTA has developed a cooperative and complimentary
relationship with FAS posts to achieve U.S. seed industry and USDA
objectives in priority markets.
Seed exports continue to track higher and as a Cooperator, ASTA has
utilized cooperator program funding for activities that have reinforced
this upward trend.

------------------------------------------------------------------------
Export Year U.S. Exports ($) World Trade ($)
------------------------------------------------------------------------
2006 879,680,000 3,993,838,493
2007 1,019,679,000 4,033,776,878
2008 1,277,310,000 4,074,114,646
2009 1,150,403,000 4,114,855,733
2010 1,253,484,375 * 4,156,004,351
------------------------------------------------------------------------
Estimate.

How ASTA Directs Cooperator Funding
ASTA receives approximately $350,000 between MAP and FMD programs.
With this budget, ASTA operates programs and activities in five
priority markets (Argentina, Brazil, Mexico, China, and India). In
addition, three regional markets (The Americas, Asia Pacific, and
Africa) are targeted. Key issues include intellectual property rights,
phytosanitary trade barriers and Adventitious Presence/Low-level
Presence in seed. Without cooperator program funding, the seed
industry's efforts to expand U.S. seed exports and business development
would be markedly reduced.
The seed industry is unique in that it is a highly regulated
industry worldwide. Utilization of the MAP and FMD programs allows ASTA
to address resulting impediments to the international movement of seed.
The focus of ASTA's export promotion activities has been primarily
focused on six areas:

International organizational meetings to promote trade in
seed and seed technology worldwide and enhancements of
intellectual property rights

Incoming/outgoing trade missions for international
consultation and discussions designed to overcome unfair trade
practices and addressing phytosanitary issues affecting U.S.
seed exports

Exploratory trade missions designed to collect market
intelligence and foster commercial relationships for U.S. seed
companies

Mutually beneficial programs of technical assistance and
capacity building designed to encourage seed regulatory and
policy reform in less developed or emerging seed markets
worldwide

Viable framework and system promotion for trade in
biotechnology products

International agricultural and seed trade policy
specifically focused on intellectual property rights protection
and phytosanitary regulations
Measuring Success
In 2010-2011, several key accomplishments were recorded as a result
of ASTA's direct participation in the cooperator programs. These
specific success stories highlight the diversity of the seed industry,
the global nature of agriculture and new opportunities for seed
exports.
Mexico's NOM 078 Regulation for Sorghum Ergot Repealed
On Dec.14, 2010 Mexico's counterpart to USDA's Animal and Plant
Health Inspection Service (APHIS) advised that the final steps to
deregulate sorghum ergot were complete. For U.S. companies exporting
sorghum seed to Mexico, this victory was a long and hard fought battle.
The action, the last step in a three year effort, was well received by
U.S. companies that ship more than $5 million of sorghum seed annually
to Mexico. ASTA's ability to direct cooperator funds to the effort
complemented APHIS's efforts via extended discussions with government
officials and Mexico's seed trade association.
Korean Market for Radish Seed Re-Opened
In 2011, a small seed company was experiencing difficulties
exporting radish seed to Korea, due to the radish yellow edge virus
(RYEV). Although the company had followed all protocols for meeting
Korean import requirements, RYEV had never officially been communicated
to the United States by Korea as a quarantine pest. For its part, ASTA
began directing efforts and learned that this particular virus was
common and most likely already present in Korea. By coordinating
testing protocols and industry intelligence, APHIS and ASTA worked with
the Korean government to lift its testing requirement for the virus.
The market for radish seed has been re-opened and the company
immediately shipped four loads of seed, worth nearly $300,000. The
company is planning to ship an additional $500,000 of radish seed for
the remainder of 2011.
Argentina Intellectual Property Rights Outreach Project
The most valuable asset of the seed industry is its intellectual
property. ASTA utilized cooperator funds in Argentina to conduct
outreach and education to industry stakeholders and growers. The
message focused on the value of seed by highlighting research
investment and the commitment of the seed industry to bring new and
improved varieties to the market each year for growers. Moreover,
advancing and acknowledging intellectual property rights was a shared
responsibility. The goal of the project was to evaluate whether or not
access to information explaining the importance of intellectual
property rights for seed and innovation had any effect on growers
opinion and their perception of purchasing legal seed. The conclusion
was that grower awareness significantly increased and that innovation
is better understood.
U.S./EU Bilateral Agreement on Seed Re-Export
Re-export of seed continues to be a major challenge for the seed
industry. Every time seed is moved from one country to another, it must
meet the phytosanitary import requirements of the next country of
import. In most cases, if the phytosanitary measures were not conducted
in the country of origin where the seed was produced, the seed cannot
be certified by the country of re-export as meeting the phytosanitary
import requirements of the next country. This issue caused many delays
and lost markets for numerous seed companies that move seed
internationally. ASTA worked closely with USDA's APHIS to negotiate
bilateral agreements between countries with significant seed re-export
problems. Due to years of APHIS and ASTA diligence, an agreement with
the European Union is expected to impact more than $50 million in seed
trade annually. APHIS continues to pursue, with ASTA's support,
agreements with other countries where re-export remains an issue,
including Mexico, Chile, and Argentina.
2010 China-U.S. Seed Legal System Conference
ASTA has been working in China and with the Ministry of Agriculture
for a number of years. In 2010, a conference utilizing cooperator funds
was held in Beijing to discuss China's seed law and ways to implement
revisions and improvements using the United States' Federal Seed Act
and state seed laws as models. In addition, presentations and
discussions included the United States' seed certification process and
the use of licenses and contracts in the U.S. seed industry. ASTA views
these steps as incremental and key to addressing more uniform,
harmonized, and transparent views and policies on intellectual property
rights for U.S. and global seed developers and enhancing grower
awareness.
Brazil Normative 36 Amended, Seed Markets Kept Open
On Dec. 30, 2010, Brazil published with no comment period,
Normative 36, which lays out new, highly restrictive phytosanitary
import requirements for 118 different species of seeds. Impacting 50
countries that export seeds to Brazil, neither the U.S. seed industry,
nor the World Trade Organization or U.S. government was informed prior
to publication of the normative. The collective value of the U.S.
commercial seed market in Brazil exceeds $10 million annually. ASTA
partnered with USDA through FAS and APHIS to address this issue. While
the restrictive normative has been amended for one year, ASTA continues
to work diligently with U.S. government as well as ASTA counterparts in
Brazil, the Brazil Seed Association (ABRASEM) and Brazil's Ministry of
Agriculture for a long term resolution so that seed exports to Brazil
will not be further interrupted.
Conclusion
These examples illustrate a number of successes that would not have
been possible if the cooperator programs were not in place. Members of
the American seed industry have benefitted greatly from the cooperator
programs and USDA's leadership via the FMD and MAP programs. Through
targeted programs and seed industry efforts, markets have been
enhanced, identified and seed is moving. Phytosanitary issues are being
addressed and incremental progress continues to be made. ASTA firmly
believes that the cooperator programs better position the U.S. seed
industry to compete in the global marketplace. Agriculture's foundation
is the seed and the U.S. seed industry is poised to continue making
headway throughout the world. U.S. agriculture depends on quality seed
and each year the U.S. seed industry strives to maintain its position
as the global leader. The commercial value of that position is
approximately $12 billion and growing.
Thank you for this opportunity to share with the Committee examples
of ASTA's work through the USDA cooperator programs, not only for the
seed industry, but U.S. agriculture in general. ASTA's motto--first the
seed--confirms the relevance and role of quality seed, here at home and
around the world. We maintain that the cooperator programs add value to
U.S. agriculture, provide dividends to the U.S. taxpayer and support
small and medium sized seed companies at the local level. We urge the
Congress, as budget discussions continue, to support the cooperator
programs at USDA. In doing so, U.S. agriculture benefits and, the U.S.
seed industry prospers.
______

Submitted Statement by U.S. Apple Association
Mr. Chairman and Members of the Committee, exports play a critical
role in the economic vitality of the American apple industry. Promotion
programs established under the farm bill are vital tools to help
maintain and increase overseas apple sales in the face of fierce
foreign competition. Under these programs, U.S. apple growers partner
with the U.S. Department of Agriculture (USDA) to increase consumption
of U.S. apples overseas and capture markets from foreign producers.
American apples are grown commercially in over 30 states, from
Michigan to North Carolina and Washington to Maine. Our $2.2 billion
crop is produced on approximately 350,000 acres. U.S. apple exports
reached almost $800 million in 2009, or 40 percent of our total crop
value. This means that over $1 in every $3 in apple revenue comes from
exports. Overseas apple sales are critical for our orchards and the
entire apple industry.
The U.S. Apple Association appreciates this Committee's support to
authorize and fund various important export promotion programs in the
2008 Farm Bill. The Market Access Program, the Technical Assistance for
Specialty Crops Program and the Emerging Markets Program are utilized
by the apple industry in partnership with USDA to grow foreign demand
and maintain a strong marketplace for our fruit. Looking to the future,
we believe our strongest market growth potential lies in the export
arena, especially in developing economies as per capita incomes
increase and diets improve. However, we face stiff competition from
foreign producers to capture these market opportunities.
USDA's promotion programs help level the playing field as we
compete in the export market against countries such as China and Chile
that have lower production costs. U.S. apple growers are confident in
their ability to compete around the world based on quality,
reliability, and often brand identity. However, they cannot compete
against the treasuries of foreign governments which support export
promotion and sales. For example in China, which grows half the world's
apples, the government has encouraged aggressive exports with the
benefit of an undervalued currency, the renminbi. This makes imports
more expensive in China and Chinese exports less expensive in foreign
markets. China's lower production costs for apples are largely
attributable to an abundant, inexpensive supply of unskilled labor in
rural areas relative to the labor-scarce United States. (Both the
renminbi and labor factors are cited in the recent report, ``China's
Agricultural Trade: Competitive Conditions and Effects on U.S.
Exports,'' (http://www.usitc.gov/publications/332/pub4219.pdf) USITC
Publication 4219, March 2011.) USDA's promotion programs are important
to help counteract the effects of such foreign assistance.
The Market Access Program (MAP) provides critical funding, more
than matched by industry contributions, to promote American apple
consumption around the world. Without MAP, individual apple growers
would not have the financial resources or organizational support for
this essential foreign market development and promotion. The apple
industry is made up of many individual small businesses, from growers
and packers to shippers and exporters. The MAP program provides a
catalyst for them to work together collectively in partnership with
USDA to grow markets overseas.
The Technical Assistance for Specialty Crops program (TASC)
complements the MAP program because it helps our industry reduce
foreign sanitary, phytosanitary and technical barriers that prohibit or
threaten apple exports. TASC is a nimble, quick-response program which
enables apple growers to reduce these trade barriers in order to
maintain access to current markets and open new ones where they can
utilize MAP.
The Emerging Markets Program (EMP) is designed to develop and
promote exports of U.S. agricultural products to low and middle income
emerging markets. EMP has opened the door for apple growers to initiate
MAP programs in new markets. The program has enabled apple growers to
conduct market research essential to understanding new potential
customers and in-country market opportunities.
MAP, TASC and EMP yield tangible and valuable results for the U.S.
apple industry and the overall U.S. economy. Several examples
illustrate how they have helped the nation's small apple businesses
successfully gain long-term export customers.
TASC and MAP Boost Apple Exports to Mexico
TASC allowed apple shippers from Michigan, Virginia and California
to bring the required Mexican inspectors to each state, to review the
cold treatment facilities and the treatments undertaken for each apple
sold to Mexico. Simultaneously, the TASC program has funded efforts for
these shippers to bring in technical experts and to work with APHIS and
our Mexican counterparts to find ways to reduce this onerous
requirement. Without TASC funding, growers and shippers in Michigan,
Virginia and California would lose important export sales and contacts
that they have spent years to develop. Between 2003 and 2010, these
exports have accounted for well over $6 million, all exports that would
not have occurred without TASC and MAP funding.
MAP funding enabled Washington apple growers, in partnership with
the Northwest pear and California table grape industries, to conduct a
month-long promotion last fall in Mexico with the popular children's
television show ``Lazytown.'' Mexico is a major market for all three
fruits and holds strong potential for additional growth. This promotion
was funded under MAP's Global-Based Initiative program which encourages
collaboration among cooperator groups who have a similar project goal.
The Lazytown promotion resulted in an historic first-time
partnership between the Mexican government, USDA and U.S. cooperator
groups. Lazytown is a popular children's show that airs to an estimated
500 million homes in 128 countries world-wide, including Mexico. The
theme of every episode of ``Lazytown'' is designed to motivate kids to
make healthy lifestyle choices. This is done through ``leading by
example.'' The main character (and healthy superhero) eats ``sports
candy'' (fruits and vegetables) to get energy to overcome the lazy
plots and schemes of the show's villain to make the kids of
``Lazytown'' lazy. The Mexican Secretary of Health endorsed this
Lazytown project and provided an umbrella under which to incorporate
national and regional Mexican retailers.
The promotion incorporated media coverage promoting health with
Lazytown's superhero, along with wide in-store sampling, superhero
store events, and promotional materials featuring the Lazytown
characters, and Washington apples, Northwest pears and California table
grapes.
Additional funding has been granted to continue the Lazytown
promotion in winter 2011-12.
As a result of this promotion, Washington apple exports increased
29% in November 2010 compared to the previous season. In value, exports
increased 38% over 2009-10 for a total of $13.5 million (an increase of
$3.7 million). Retailers experienced strong sales lift, and the
promotion strengthened business relationships with the apple industry.

Importantly, this promotion yielded successful results despite
imposition by Mexico of a new 20 percent duty on imports of U.S. apples
last August as the fall harvest was starting. Without the tariff,
Mexican consumers could have enjoyed even more U.S. apples.
EMP and MAP: India Seen as Key Future Market for Apple Exports from
Pennsylvania, New York and Michigan
The apple industry used EMP funds to conduct market research in
India. An in-country representative was then hired to help identify
appropriate targets and educate Indian apple importers and retailers
about the quality and varieties of the apples grown on the East Coast
of the U.S. In 2009-10, eastern apple shippers developed a strong
business in India with sales in excess of $2 million. These shippers
hope to expand this new market by offering exports off of the East
Coast that are competitive with other routes. Indian interest has been
strong for apples from Michigan, New York and Pennsylvania. All of this
interest and sales can be directly traced back to the impact of the
EMP-funded research, initial market development activities, and MAP-
funded trade show presence and programs to promote apples at retail and
wholesale outlets in India. These businesses in Pennsylvania, Michigan
and New York view the Indian market as a key element to their future
businesses and long-term success.
MAP: Middle East Market Grows for Washington Apples
Using MAP funds, retail promotions and merchandising activities
were implemented by the Washington apple industry in the United Arab
Emirates and Saudi Arabia in the current marketing year. As a result,
exports of apples expanded significantly to the two markets. From
September 1, 2010 through March 31, 2011, Washington apple exports rose
by more than one third in volume, compared to the same period last
year. Export value increased 32 percent, or $9.1 million.

------------------------------------------------------------------------
2009-10 2010-11
---------------------------------------------------------
No. of Estimated $ No. of Estimated $
Cartons Value Cartons Value
------------------------------------------------------------------------
UAE 972,073 $18.5 million 1,297,568 $23.9
million
Saudi Arabia 635,431 $12.1 million 861,973 $15.8
million
------------------------------------------------------------------------

Promotional activities reinforced the quality image of Washington
apples and created awareness, visibility and demand for new apple
varieties, namely Gala and Fuji, which registered record high export
growth this season (Gala and Fujis surging 75.4% and 17.7%,
respectively).
Despite the competition from Europe, Southern Hemisphere suppliers
and Lebanon and Syria, Washington apples are maintaining upward sales
momentum.
TASC: Reducing Technical Barriers for Apple Exports to Mexico
Mexico is the single largest export market for U.S. apple exports.
Consequently, the apple industry must address technical trade issues
with the Mexican government to help ensure that the market remains
accessible for growers, shippers and exporters.
In 2009, TASC funded projects to produce pest information and
educate Mexican plant quarantine officials about the Pacific Northwest
fruit industry, including apples. One program provided for survey
trapping for the Oriental Fruit Moth, as required by Mexico's Director
General de Sanidad Vegetal (DGSV), from spring to the flight of the
final generation. The trapping was done in Idaho and Washington to
verify population levels of OFM previously reported to Mexico which
were based on trapping done a number of years ago. Another program
funded an on-site verification visit of Mexican plant quarantine
officials during the apple growing season to review conditions in
registered export orchards and participating packinghouses.
TASC: Providing MRL Data for Foreign Markets
TASC has funded the establishment and continued operation of a
vital database of international maximum residue limits (MRL's) for
specialty crops. The apple industry uses this database to verify
specific MRL requirements in foreign markets. Produce that does not
meet the MRL standards of an overseas country may not be exported
there. EPA has participated as a financial partner to support this
project. The MRL database for specialty crops is recognized by the U.S.
Government, commodity groups and pesticide registrants as having the
most accurate MRL information available.
Conclusion
MAP, TASC and EMP are important USDA programs which yield direct
increases in export sales for U.S. apple growers, help maintain jobs
for their employees and support their rural communities. These programs
help growers compete against foreign producers aided by overseas
governments.
In partnership with USDA, apple growers are committed to succeeding
in the export market in order to build strong future for their family
businesses. To remain globally competitive, the American apple industry
supports strong MAP and other promotion programs as part of an
aggressive trade title in the next Farm Bill.
______

Submitted Statement by U.S. Wheat Associates; National Association of
Wheat Growers
The free and fair flow of trade is essential to U.S. wheat farmers
as roughly half of the wheat they produce is exported each year. In the
most recent full marketing year (2009/10), the United States exported
24.0 million metric tons (MMT) of wheat, roughly 40 percent of
production. Also in 2009/10, the United States accounted for nearly 18
percent of global exports as world wheat exports were estimated at
135.8 MMT. In 2010/11, U.S. wheat exports are expected to reach 34.5
MMT, representing 58 percent of domestic production and 28 percent of
world wheat trade.
The National Association of Wheat Growers (NAWG) was founded more
than 60 years ago by producers to work together for the common good of
the industry. Today, NAWG works with its 21 state associations and many
coalition partners to unite the wheat industry on issues as diverse as
federal farm policy, environmental regulation and the future
commercialization of biotechnology in wheat.
U.S. Wheat Associates (USW), the wheat industry's export market
development organization, conducts training and provides information to
customers in more than 100 countries on behalf of America's wheat
producers. USW's activities are made possible by producer check off
dollars managed by 18 state wheat commissions and cost-share funding
from the Market Access Program (MAP) and Foreign Market Development
(FMD) program administered by USDA's Foreign Agricultural Service. USW
works on behalf of American wheat producers to increase wheat exports
by collaborating with foreign government officials and industry
representatives to address market constraints and opportunities.
USW and NAWG appreciate the opportunity to comment for the record
on the importance of market development programs and their role in
agricultural trade. Wheat has benefitted from FMD and MAP for many
years and was one of the first associations to utilize the FMD program
after its creation in the 1950s. U.S. wheat producers understand the
importance of exports to their profitability and contribute roughly 50
percent of USW's promotional expenses through direct contributions and
in-kind support to match government program funds. These funds support
a network of 15 overseas offices as well as the promotional activities.
USW staff presence in these markets allows for routine contact with
overseas customers to educate them on the process and benefits of
buying U.S. wheat, to identify and promote U.S. wheat to potential new
customers and to follow-up on previous purchases to ensure a positive
experience from start to finish. The routine on-the-ground contact
provides assurance, creates confidence and is a key factor for
continuing a high level of U.S. wheat exports in the face of
competition from a number of wheat exporting nations.
USW promotional activities funded by MAP and FMD are multi-faceted.
One on one meetings through trade servicing educates customers on the
marketing system, qualities and contracting of U.S. wheat and creates
comfort and confidence in navigating the complex U.S. system. Technical
assistance to properly mill and bake U.S. wheat ensures that the full
value of U.S. wheat is extracted from each purchase. USW routinely
sponsors trade teams of customers to the United States for a firsthand
experience in understanding the various assurances built into our
marketing system. In addition, customers routinely attend courses at
partner institutions such as the International Grains Program at Kansas
State University, the Northern Crops Institute at North Dakota State
University and the Wheat Marketing Center in Portland, Oregon.
The increased quantity of wheat exports to Nigeria is an example of
the remarkable success of the MAP and FMD export promotion programs.
USW worked collaboratively with new market players to educate them on
the U.S. wheat marketing system and to help develop local products made
from U.S. wheat. These efforts resulted in the importation of all six
U.S. wheat classes and to Nigeria becoming the top U.S. wheat customer
in 2009/10. USW efforts resulted in loyalty by Nigerian millers and the
United States maintains an 80 percent market share, despite increased
price competition from Canada and the Black Sea region.
Agriculture is a bright spot in the U.S. economy and agricultural
trade is unique compared to traditional goods. Agriculture consistently
maintains a trade surplus, thanks in part to cooperator activities
funded through FMD and MAP programs. USW and NAWG are proud of the
success already accomplished by USDA/FAS as well as the relationship
with USTR in overcoming trade and technical barriers. The structure
within USDA and the communication between intertwined agencies such as
the Foreign Agricultural Service (FAS), the Animal Plant Health
Inspection Service (APHIS), the Federal Grain Inspection Service (FGIS)
and others facilitates the efficient export of goods as well as the
timely resolutions of trade disruptions. The special trade issues that
agriculture faces needs to be an important consideration in any
reorganization plan of the government's trade-related agencies.
Attached is a fact sheet specific to wheat on the FMD and MAP
programs to illustrate the impressive benefits of USDA's market
development programs, and their admirable returns on investment. We
encourage Congress to support the Obama Administration's fiscal year
2012 budget request and fully fund both programs at $34.5 million and
$200 million, respectively. As already proven, these relatively small
investments by the American people will continue to create impressive
returns to U.S. farmers, U.S. agriculture and the U.S. economy.
attachment
Fact Sheet
Market Access Program, Foreign Market Development Benefits
January 2011
The Market Access Program (MAP) and Foreign Market Development
(FMD) program administered by USDA's Foreign Agricultural Service (FAS)
form the core of a highly successful partnership between nonprofit U.S.
agricultural trade associations, farmer cooperatives, nonprofit state-
regional trade groups, small businesses, and USDA to share the costs of
overseas market development efforts. These programs continue to have a
positive and significant impact on U.S. agricultural exports. MAP and
FMD are crucial to the U.S. wheat industry to maintain sales and market
share in an increasingly competitive trade environment.

By any measure, MAP and FMD are good government programs with:

excellent returns, that actually grow with investment, to
the government and farmer cooperators;

proven potential to create American jobs and help the rural
economy grow;

efficient, effective administration;

direct contributions that improve conditions for the private
sector to increase exports;

benefits to the entire agricultural supply chain from wheat
farmers to the longshoremen who load wheat on vessels for
export.
Excellent Return on Investment
An independent study conducted by IHS Global Insight, Inc., for
USDA in 2010 found that between 2002 and 2009, the incremental
investment in market development increased U.S. export market share by
1.3 percentage points and the annual value of U.S. agricultural exports
by $6.1 billion. For every additional $1 expended by government and
industry on market development, U.S. food and agricultural exports
increased by $35.
These results are consistent with the conclusions of a January 2010
economic analysis of wheat export promotion showing U.S. wheat farmers
received $23 in net revenue for every $1 they invested in export
promotion between 2000 and 2007. The study also showed that every $1
invested by U.S. wheat farmers and the government returns $115 to the
U.S. economy.

------------------------------------------------------------------------

------------------------------------------------------------------------
$1 investment

= $35 increase in exports

= $23 to Farmers

= $115 to U.S. Economy
------------------------------------------------------------------------

An Effective Public-Private Partnership
Industry funds currently represent almost 60% of total annual
market development spending, up from about 45% in 1996 and roughly 30%
in 1991, which demonstrates farmer commitment to the effort (Source
USDA). Like other cooperators, U.S. wheat farmers are strongly
committed to this partnership. Wheat commissions from 19 states
contributed an estimated $12.8 million in checkoff funds and in-kind
services in 2009/2010 to qualify for MAP and FMD activities conducted
by U.S. Wheat Associates. These cost-share programs provide a critical
incentive to invest in U.S. grain export market development. Without
them, it is highly unlikely that there would be sufficient private
funds to maintain a strategic, coordinated export promotion program in
the increasingly competitive global wheat market.
MAP and FMD Contribute to Jobs at Home and Capacity Building Abroad
U.S. agricultural exports totaled nearly $109 billion in FY10.
Since MAP was created in 1985, U.S. agricultural exports increased by
nearly 300 percent at their peak in 2008 (Source USDA). USDA estimates
that every $1 billion in agricultural exports create 8,000 jobs. Thus
more than 800,000 Americans have jobs that depend on these exports
thanks in part to MAP, FMD and related programs. We can expect
increased demand for agricultural products as the global economy
recovers, which reinforces the need for such valuable programs as MAP
and FMD that help create, expand, and maintain markets for U.S.
agricultural products.

------------------------------------------------------------------------

-------------------------------------------------------------------------
``. . . more than 800,000 Americans have jobs that depend on these
exports thanks in part to MAP, FMD and related programs.''
------------------------------------------------------------------------

The benefits of export market development extend beyond U.S.
shores, however. Nigeria imported more U.S. wheat than any other
country in 2009/10. Since 2001 when USW opened a technical service
office in Lagos supported by FMD and MAP funds, average annual wheat
sales to Nigeria have doubled to almost 3 million metric tons. Nigerian
flour milling executives say wheat export promotion is helping build
economic capacity in their country. One senior executive said: ``MAP
and other programs provide training for our employees and if we can do
more together, the potential for significant growth is there.'' Noting
that USW uses MAP funds for technical training that helps build new
wheat-based food markets, the CEO of Nigeria's Honeywell Flour said:
``Whatever we have achieved, the foundation has been laid by U.S. Wheat
Associates. We know that USW is funded by farmers and USDA. It is money
well-spent.''
MAP and FMD Help Counter Subsidized Foreign Competition
In recent years, the Canadian Wheat Board monopoly seller, the EU,
the Cairns Group, and other foreign competitors have devoted
considerable resources on agricultural export market development
activities, a significant portion of which is carried out in the United
States. Eliminating or reducing funding for MAP in the face of
continued subsidized foreign competition will put American farmers and
workers at a substantial competitive disadvantage. Conversely,
maintaining or increasing MAP and FMD programs, which are non-trade
distorting and not subject to World Trade Organization (WTO)
disciplines, increases U.S. export competitiveness.
Funding for FMD is designed to establish an on-the-ground country
or regional presence, identify new markets and address long-term
foreign import constraints and export growth opportunities. Yet funding
for FMD has been static for many years while overseas expenses continue
to increase. Like other FAS cooperators, U.S. Wheat Associates does all
it can to maximize its efficiency and has already made significant FMD
cuts by consolidating offices and reducing staff. Additional funding
cuts will force U.S. Wheat Associates to abandon markets with upside
potential, an outcome that will only benefit our competitors and hurt
American farmers and those whose jobs depend on exports.

Protecting MAP and FMD makes good economic sense. If you want to
reduce government spending and increase jobs, cutting MAP and FMD is
not the way to do it.
______

Submitted Statement by USA Rice Federation
Mr. Chairman and Members of the Subcommittee, the USA Rice
Federation thanks you very much for this opportunity to submit comments
about market-promotion programs (MPP's) and their effectiveness in
expanding exports of U.S. agricultural products. The hearing is very
timely and we appreciate you holding it.
The USA Rice Federation strongly supports market-promotion programs
and the highly productive role played by the Foreign Agricultural
Service (FAS) in implementing them. As an active participant in the
U.S. Agricultural Export Development Council, an organization to
promote U.S. agricultural exports, the USA Rice Federation works
aggressively with other members to advocate authorization of and annual
funding at farm bill-legislated levels for the Market Access Program
(MAP) and the Foreign Market Development Program (FMD), the two market-
promotion programs that we use most frequently and have participated in
for many years.
Exports
The U.S. rice industry is a key player in the global rice market
and the economic health of the rice industry is tied to exports. While
the United States produces only 2 percent of global rice output, the
United States ranks, in any year, as the third or fourth largest global
exporter and between 45 and 50 percent of the U.S. rice crop is
exported.
The United States exports all types and forms of rice: long grain,
short grain and medium grain in the form of white-milled rice, brown-
milled rice, parboiled rice, and paddy or rough rice (unprocessed
harvested rice). Approximately \2/3\ of U.S. exports are milled rice
and the remaining \1/3\ are rough-rice exports.
The United States exports rice across the globe, with a major
presence in North and Central America, Northeast Asia, the European
Union, Turkey and the Middle East, and Africa.
In many years, the U.S. rice industry exports a greater portion of
production than any other major rice exporter and this dependence on
trade makes the U.S. rice industry particularly vulnerable to trade
disruptions or barriers. As one of the most protected and sensitive
commodities traded worldwide, market-access obstacles are widespread
and discourage increased exports of U.S. rice.
Imports
On the import side, U.S. tariff protection is minimal, and 15
percent of domestic consumption is sourced from imports, largely
fragrant rice from Thailand and basmati rice from India. Vietnam and
China are also import sources.
Economic Contributions
U.S. rice production supported 128,000 jobs and more than $34
billion of economic output nationally in 2009. Those directly involved
in rice exports contributed $6 billion in output and supported more
than 14,000 jobs.
U.S. rice exports support small- to-medium-size enterprises
(SME's):

According to the 2007 Census of Agriculture (USDA/NASS),
there are 10,431 rice farm operators in the United States (AR--
4,602; CA--2,518; LA--1,303; MS--621; MO--720; and, TX--667).
100% of these farms would qualify as SMEs.

USA Rice mill membership through the USA Rice Millers'
Association and/or USA Rice Council includes 30 mills,
representing nearly all U.S. rice milling capacity with mill
members in seven states: Arkansas, California, Florida,
Louisiana, Mississippi, Missouri, and Texas. At least 75% of
the mills qualify as small/medium-size enterprises.

The USA Rice Millers' Association also has 33 associate
members, which include exporters and allied businesses, an
estimated \2/3\ of which qualify as small/medium-size
enterprises.

The USA Rice Merchants' Association represents rough-rice
merchandisers and seedsmen, as well as associated members. The
Association has 28 merchant members and 11 associate members.
Of the total membership, 92 percent qualify as small/medium-
size enterprises.
MAP and FMD
The Market Access Program and Foreign Market Development Program
play key roles in helping to promote U.S. rice sales overseas. USA Rice
Federation industry members spend more than $3 in matching funds for
each $1 of FAS funds received.
By participating in and contributing to the MAP-FMD public-private
partnership, USA Rice Federation members are able to export rice
successfully in a highly-competitive world-rice market and, at the same
time, contribute significantly to local, state, and national economies.
The USA Rice Federation uses MAP and FMD funding in over 25 markets
to conduct successful export market development initiatives, including
Mexico, Turkey, Nigeria, and South Korea.
The USA Rice Federation has used MAP and FMD funds to expand rice
exports to Mexico, the largest customer for U.S. long-grain rice. Of
the rice consumed in Mexico, 80% comes from the U.S. U.S. rice sales to
Mexico have boomed in recent years, reaching $313.4 million in value in
2010, which is nearly double the total export value in 2005. USA Rice
export promotions have resulted in per-capita rice consumption doubling
in Mexico during the past 25 years, to reach 17 pounds per capita.
In Turkey, the USA Rice Federation used MAP and FMD funds to
organize seminars for the Turkish rice industry and consumer groups to
help overcome trade barriers erected by the government (pricing, import
licensing, minimum import pricing). U.S. rice exports were at record
levels in 2010 (428,000 MT), a volume increase of 866% when compared to
2009 and Turkey is now the third-largest market in value and second in
volume terms for U.S. rice-export sales. The U.S. rice industry sells
mostly medium-grain rice, but also exports some long-grain rice to
Turkey.
World food supply and price conditions led Nigeria to modify its
import regime in 2009, reducing tariffs on rice from 85% to 10% or
less. In the previous 25 years little or no U.S. rice was exported to
the country. The USA Rice Federation conducted successful trade-
servicing and promotion activities by using MAP and FMD funds to re-
establish the Nigerian export market. These initiatives resulted in the
U.S. exporting to Nigeria 75,500 metric tons of long-grain parboiled
rice, valued at $39.3 million, in calendar year 2010. MAP and FMD
funding make possible a further strengthening of Nigeria's consumer
base for U.S. rice exports and the potential for Nigeria to serve as an
export gateway for U.S. rice into other African markets.
In 2001, South Korea began importing U.S. rice under its minimum-
access WTO obligation and channeled the imports into industrial uses
under strict government control. In 2005, rice imported into South
Korea began to enter the country's consumer market. In 2008, following
a FMD-funded USA Rice Federation trade mission to bring South Korean
buyers to the U.S. to learn about the U.S. rice industry, a South
Korean retailer developed an online business to purchase U.S.-origin
rice. Since that time the company's total online sales of U.S. rice has
expanded from less than 20 percent to 70 percent and there has been a
60 percent increase in the buyer's sale of U.S. rice being made to
South Korean consumers. The company is now ranked as the top U.S. rice
sales outlet through online open markets in South Korea.
Conclusion
U.S. market promotion programs and the federal-private-sector
partnership they have established are significant trade and economic
resources for the nation, its agricultural sector, and, specifically,
the U.S. rice industry, to compete in world markets. Equally as
important is the fact that to achieve President Barack Obama's National
Export Initiative goal of doubling U.S. exports over five years, USA
Rice believes that the upcoming 2012 Farm Bill should emphatically
reaffirm Congress' longstanding commitment to market promotion programs
by providing additional resources for them.
MAP and FMD are among the few tools specifically allowed without
restriction under WTO rules to help American agriculture and American
workers remain competitive in a global marketplace that is
characterized by subsidized foreign competition. The MAP and FMD
programs have been tremendously successful and extremely cost-effective
in maintaining and expanding U.S. agricultural exports, protecting and
creating American jobs, and strengthening farm income.
The USA Rice Federation is most appreciative for the opportunity to
comment on market promotion programs. We look forward to continuing to
work with the Subcommittee and the House Agriculture Committee on
behalf of MPP's, in particular MAP and FMD, which are the two we use
most frequently. If we can assist in any other way regarding market
promotion programs, please call on us at any time.
______

Submitted Questions
Response from John Brewer, Administrator, Foreign Agricultural Service,
U.S. Department of Agriculture
Questions Submitted by Hon. Timothy V. Johnson, a Representative in
Congress from Illinois
Question 1. Mr. Brewer, in your written statement you highlighted
the fact that ``participants from all corners of the U.S. agricultural
community utilize FAS-administered trade programs.'' Earlier this year
USDA proposed some changes to the MAP and FMD programs which seem to
place a greater emphasis on funding small and medium-sized entities
(SME) directly. Given that virtually all of the ultimate recipients or
beneficiaries are SME's, could you clarify exactly what you hope to
achieve with the proposed program changes?
Answer. FAS initiated a discussion on possible adjustments to the
market development programs in November 2010 with the U.S. Agricultural
Export Development Council's (USAEDC) 70+ members to seek their input
on strengthening the effectiveness and ensuring the relevancy of the
programs.
USAEDC feedback has informed FAS on program strengths and where
programs could be strengthened. This feedback will lead to more
effective program management that ensures the programs are accessible,
connect with the needs of the international market, and operate in a
manner that meets regulatory requirements, the needs of the
stakeholders, and can be accomplished with available FAS resources. The
possible program adjustments highlight small and medium sized
enterprises (SMEs), in line with the President's National Export
Initiative (NEI). NEI, in part, aims to expose U.S. companies to the
benefits of the export market and resources available to help them take
advantage of export opportunities, a goal consistent with the
objectives of the market development programs. FAS briefed both House
and Senate agriculture committee staff in early December regarding the
proposals and solicited their input.
FAS intends to continue these discussions. Any resulting program
changes would be thoroughly reviewed with stakeholders and
Congressional staffs, gradually implemented, and have a primary goal of
sharpening program effectiveness. FAS's goal remains to enhance the
effectiveness of program operations, promote the diversity of groups
participating, improve groups' performance through better training,
promote outreach to SMEs, and ensure administrative efficiencies.

Question 2. Mr. Brewer, USDA has proposed to provide some direct
funding to small businesses through the MAP program. As you know, these
programs are successful in part because of the stringent accountability
required of cooperators. FAS requires significant accounting and
reporting by participants. If this proposal were to be implemented,
could you please describe how you would avoid losing the efficiencies
and accountability gained through partnering with farmer cooperatives,
state and regional trading groups, and trade associations?
Answer. FAS raised with USAEDC membership the concept of direct MAP
funding to small businesses. After discussion with stakeholders, FAS
decided that the four State Regional Trade Groups (SRTGs) should
continue as the primary outreach and program delivery entities to SMEs,
on FAS's behalf. To that end, FAS awarded additional program funds to
the SRTGs through the 2011 MAP Global Broad-based Initiatives program
to strengthen SRTG outreach to find and educate new exporters on doing
business in the international marketplace. In 2010, the SRTGs helped
more than 700 U.S. companies through the branded program, and many more
in their generic activities.

Question 3. Mr. Brewer, we have heard concern from industry
participants about these proposed changes to MAP and FMD. Have you
heard these concerns and made revisions or proposed any new changes to
the original announcement?
Answer. FAS initiated discussion on concepts to strengthen the
market development programs with U.S. Agricultural Export Development
Council (USAEDC) membership at the November 2010 USAEDC Annual Workshop
in Baltimore. FAS has heard industry participant's concerns and,
importantly, remains in an ongoing dialog with our partners and other
stakeholders on ideas for program improvements.
At this time, there are no decisions that would warrant adjusting
program guidelines.

Question 4. Mr. Brewer, you highlighted the extensive presence that
FAS has throughout the world. Could you describe in greater detail the
unique role filled by your Foreign Service officers? What is
accomplished through in-country interactions, that would not be
possible just from a desk here in D.C.?
Answer. Our global network of agricultural attaches and locally
hired staff identify problems, provide practical solutions, and work to
advance opportunities for U.S. agriculture and support U.S. foreign
policy in the countries in which they work. FAS employees overseas
provide market information gathered from contacts and travel throughout
the countries in which they operate; represent USDA in market access
discussions with foreign governments; partner in market promotion
activities conducted in-country; facilitate capacity-building and food
assistance programs with appropriate contacts in country and provide
trade servicing for U.S. exporters by explaining the market and the
opportunities within. FAS Foreign Service Officers are the face of U.S.
agriculture overseas, and engage in essential contact-building and
outreach to promote opportunities, explain U.S. policies and positions,
and cultivate allies in agricultural fora.
A critical function that cannot be accomplished from a desk in
Washington is resolving agricultural shipment problems through
ministry-to-ministry engagement. For example, French authorities
detained three containers of Florida citrus fruit at the port of
LeHavre earlier this year due to the suspected presence of citrus
canker. When the FAS office in Paris discovered that only one out of
the three containers included fruit from a grove suspected of actually
harboring the disease, they presented the evidence to the French
Ministry of Agriculture. FAS then worked closely with USDA's Animal and
Plant Health Inspection Service to issue an additional declaration
needed for the European Union, which stated that the fruit came from
groves free of citrus canker. With this new and proper documentation
the French authorities released 90 percent of the citrus from this
shipment as eligible for import, with a value of $100,000.
In another instance, the FAS office in Algiers intervened to ensure
the delivery of two blocked shipments of planting seeds after learning
that the Algerian Ministry of Agriculture had not responded to the
company's request for an attestation that the shipment was eligible for
entry into Algeria. FAS Algiers was able to contact the Ministry,
quickly resolve the issue and gain release of the delayed shipments of
vegetable seeds, one a sea freight order for $193,000 and the other an
air freight order for $44,000. The company was at risk of losing an
annual contract worth more than $560,000 in trade with Algerian
clients. In both cases our close contacts with both private and public
entities facilitated the resolution of the issues.

Question 5. Mr. Brewer, you mentioned in your testimony that ``FAS
employees serving in U.S. embassies are our eyes and ears around the
world, providing the agricultural expertise to identify and seize
opportunities, by capturing real-time information on emerging trade and
market development issues, and averting problems before they become
trade barriers that impede U.S. exports.'' How do FAS employees
leverage their in-country presence to fulfill these responsibilities?
Answer. FAS employees work to identify market opportunities by
providing market intelligence, identifying best market prospects and
potential barriers to increased market access for agricultural exports.
In some countries FAS employees provide ground truth when agricultural
market information is not readily available and/or unreliable. FAS
staff identify proposed detrimental trade actions. Early identification
is essential to developing strategies to quickly address and resolve
threats to trade which range from a blocked shipment to host government
legislation. FAS overseas offices support U.S. trade objectives by
proposing activities and selecting candidates for training, technical
assistance or scientific and academic exchanges that serve to educate
other countries in new technologies, trade-friendly regulatory systems
and infrastructure development. Our ability to identify and respond to
both opportunities and threats is the result of the cultivation of an
extensive network of contacts, both in the government and the private
sector in the countries where FAS has an in-country presence.
In May 2010, FAS' Agricultural Trade Office (ATO) in Beijing led a
delegation of 35 Chinese buyers to participate in the Food Marketing
Institute show in Las Vegas, Nevada. The delegation was mixed between
experienced buyers from Beijing and new buyers from specifically
targeted emerging city markets such as Qingdao, Zhengzhou, Dalian,
Harbin and the provinces of Xinjiang and Inner Mongolia. One ATO staff
person accompanied the group, providing translation and general support
for the group. ATO's initial estimate of sales generated from this show
was $15 million for one year. At eight months, confirmed actual sales
have exceeded $17 million. Of particular note are the sales of alfalfa,
which were a direct result of the expanded program set up by ATO; and
sales of fruit into the emerging market city of Qingdao.
In 2010, U.S. exporter Max InterAmericas/Maruchan Foods met with
ATO Sao Paulo to introduce themself and solicit market advice for
introducing their product (noodles) to the Brazilian market. Meetings
arranged on the same day between Max InterAmericas/Maruchan Foods and
Spectrus Importacao led to the importer purchasing its first container
of noodles in October 2010. For 2011, sales are expected to reach $2
million.

Question 6. Mr. Brewer, your Foreign Service officers (FSO) are
known for their expertise in trade and agricultural issues abroad.
Could you describe the background and training required at USDA which
makes your FSO's unique and helps them effectively promote U.S.
exports?
Answer. To be eligible to apply to be a Foreign Service Officer,
candidates must have 18 months of USDA service and one year of FAS
service. Successful candidates undergo intensive on-the-job training,
including learning about the USDA and FAS mission and objectives, such
as commodity and trade reporting, trade policy, market development,
domestic policies, regulatory issues affecting food safety and animal
and plant health, and supervision and management. Once selected for an
assignment, FSOs enter into intensive training including language, area
studies, cultural awareness and other courses related to their
assignment. Many FSOs have agricultural backgrounds and education,
including advanced degrees, are former Peace Corps volunteers and have
other related experiences.

Question 7. Mr. Brewer, in your testimony you highlighted the value
of U.S. farm and food products. In your view, how important is it to
expand exports of branded products through the Market Access Program to
global consumers who associate those brands with high-quality U.S.
products?
Answer. The export successes of small companies and agricultural
cooperatives achieved through branded activities funded by the Market
Access Program (MAP) are well documented in the FAS Office of Trade
Programs' publication ``Export Programs at Work,'' copies of which have
been shared with Congressional offices. While generic promotion works
well for broad commodities, such as grains and oilseeds, and products
for which branding is difficult, such as beef and leather, for the
processed products sector and some specialty crops, branding is
fundamental. With nearly 95 percent of the world's consumers living
outside the borders of the United States, many of whom are young and
looking for new products to try, MAP provides critical seed money to
help our small, inexperienced and emerging food processors to better
understand the opportunities, and challenges, of the export market, and
to see if and how they can develop such opportunities into actual
foreign sales.
Questions Submitted by Hon. Collin C. Peterson, a Representative in
Congress from Minnesota
Question 1. What criteria does USDA use to evaluate the
effectiveness of the five export programs under FAS?
Answer. Program effectiveness is assessed in a number of ways. Each
participant submits a Unified Export Strategy (UES), which is an
activity plan and application for funding for all programs sought, and
a reporting tool for results from previous program activities for
returning organizations. The UES process covers all five FAS
administered export programs. The review process for recommending
funding, places the most weight on evaluation of past efforts and
program results. Each recipient of program funding is obligated to
annually report results against the performance measures established in
their approved program/project proposals.
Since 2005, FAS has tracked a variety of program metrics, UES
performance measure results, industry contributions, and various
measures related to small company participants, i.e., number of
companies making their first export sale. FAS, in 2010, commissioned an
update of a 2007 third party cost-benefit study of market development
programs. The updated study analyzed the impact of the increase in
foreign market development investment that took place under the 2002
Farm Bill through 2009. It concluded that every dollar of increased
investment in market development activities resulted in $35 in U.S.
agricultural exports. It also reported that U.S. agricultural exports
were $6.1 billion higher in 2009, compared to what they would have been
without the increased investment.

Question 2. Are their requirements that entities that receive
Market Access Program (MAP) funding ``graduate'' from the program after
a certain number of years?
Answer. Small and medium-sized entities (SMEs) participating in
MAP-branded programs are limited to 5 years of funding in a single
country, after which entities graduate from the country.

Question 2a. If so, how many MAP recipients have actually graduated
from the program since inception?
Answer. MAP branded activities have a 5 year graduation period for
branded activities for a given company in a given market. Since 1994,
when FAS began keeping detailed SME records, about 8,800 SMEs have
participated in branded MAP programs and, of those, about eight percent
overall are documented as having graduated out of a particular market.
A company may stop using MAP funds in a market before the end of their
5 year period; may become established and shift to enter a different
market or may leave the market and program for business reasons. A
given company may be in more than one market, and each company-market
situation has its own graduation period. The State Regional Trade
Groups, that manage the larger portion of the MAP branded effort, have
tracking systems in place to monitor such activities, by company and
market, to ensure participating companies graduate out of a given
market at the end of the respective 5 year period.

Question 2b. How many are still exporting the product to the region
for which they were receiving funding?
Answer. The 5 year period establishes a company's presence in a
market. FAS does not track a company's sales after it is no longer
receiving MAP funds.

Question 2c. If not, what are some reasons why graduation may not
be possible for some commodities, regions, or organization?
Answer. In MAP branded programming, FAS partners with program
participants, such as State Regional Trade Groups (SRTGs), in a 50/50
cost share effort to assist individual small companies to establish
their brand in a particular market. For most of the companies
participating in branded programs, 5 years is appropriate for the
targeted markets. Participation in some of the major foreign trade
shows is exempted from the graduation requirement as such events often
draw buyers from all over the world, in addition to importers from the
country hosting the show.

Question 3. How does USDA determine the priority among different
U.S. commodities for the Foreign Market Development Program (FMDP)?
What are the primary criteria for deciding funding levels?
Answer. Foreign Market Development (Cooperator) Program (FMD)
funding is allocated as broadly as possible to achieve the program's
purpose to create, expand or maintain foreign markets for U.S.
agricultural commodities and products. FMD does not set priorities
among commodities. Close to 25 commodity organizations representing
broad commodity and product sectors--from wheat and feed grains, to
dairy, leather and livestock genetics--participate in FMD. Potential
and existing Cooperators apply for FMD and any of the other four USDA
market development programs using the Unified Export Strategy (UES).
This document is an application, an activity plan, and is also a
reporting tool. The UES is the basis for determining if an organization
will receive funding. On receipt, the UES is first reviewed for
sufficiency, i.e., all information necessary has been submitted. The
UES then undergoes a thorough qualitative review by FAS program,
technical and field staff to evaluate the applicant's program proposal
and the merits of the market conditions noted as justification. In that
review, FAS also assesses the applicant's capabilities to conduct
strategic planning, implement and manage programs, and, for returning
groups, the past record of the organization on those factors, along
with program evaluations and demonstrated results. Demonstrating
results is the primary criteria. For on-going programs, increased or
decreased funding is in large part based on past performance, the
previous year's level of funding, and current year available funds. New
applicants are reviewed on potential program impact, capabilities and
resources to implement requested programming. Recommendations then
undergo a quantitative competition in a formula. The contributions the
applicant brings to the program are the heaviest weighted factor in the
final funding level.
Question Submitted by Hon. Vicky Hartzler, a Representative in Congress
from Missouri
Question. Mr. Brewer, in your written statement you spoke to the
problem we have in emerging markets with counterfeiting of U.S. brands
and what FAS is doing in coordination with EMP and participants to
protect U.S. brands and prevent counterfeiting. Could you elaborate,
for the Committee, about some of the findings from the above, further
work to preserve intellectual property rights such as trademarked
brands, and protection of branded products in emerging markets?
Answer. FAS does accept EMP proposals that address counterfeiting
of U.S. brands. As an example, for more than a decade, the Ginseng
Board of Wisconsin (GBW) has battled Chinese counterfeiters selling
fake Wisconsin Ginseng. With 90 percent of its exports going to China,
the GBW moved aggressively to regain control of its brand. Using EMP,
GBW initiated research to develop a technique to detect trace elements
of ginseng's valuable root to Wisconsin or where it was grown
originally; initial findings are promising.
FAS' global network of agricultural attaches also work to identify
IPR infringement of U.S. products overseas and help protect U.S.
producers. For example, in response to trademark property threats, FAS
offices in China provide intellectual property assistance to U.S.
cooperators, agricultural companies and interests, both newly entering
and already established in the China market. Additionally, FAS Beijing
provides on-the-ground investigation of the IPR protection of U.S. food
and agricultural products. In a 2010 report, prepared by FAS Beijing,
FAS' attaches identified the most at-risk U.S. products and offered
recommendations for U.S. exporters to combat IPR infringement and
minimize its impact. This information has been provided to U.S.
exporters via public attache reports for use by the agricultural
exporting trade. Additionally, FAS has provided information to bolster
the U.S. Embassy's web-based IPR toolkit and maintains an IPR issues
page on the FAS Embassy website with useful information for U.S.
exporters on how to protect their rights.